Diagram 2 shows that, over this relatively long period, there is no systematic relationship between the growth of the economy and the change in the unemployment rate (if there was, the dots would be clustered around a downward sloping line).
When we met last week, the Bank's Governing Council discussed whether we've raised rates enough, and we considered the likelihood that the policy rate may need to remain restrictive for longer to return inflation to the 2% target. Governing Council also discussed the risks around our projection. The biggest upside risk is one I just mentioned-that services price inflation could be stickier than projected.