We did continue the process of getting interest rates up towards normal in June, but have not done anything more in that direction in the following six months. Why not? I think the answer has been obvious to nearly everyone - something did intrude and the incoming data from abroad showed that developments were not remaining on track.
Against this background, the Bank raised its target for the overnight rate to 2.5 per cent on 19 October. The base-case projection assumes further reduction of monetary stimulus over time, to keep the economy near its production potential and to achieve the inflation target.