We also pointed out that total CPI inflation would continue to be importantly affected by swings in crude oil prices and that it would likely fall temporarily below the core rate in the first half of 2004 before steadying out at a rate close to core inflation.
The Bank has been pursuing inflation targets for 25 years, and the average rate of inflation has been extremely close to target over that period. This alone suggests that our models have done their job reasonably well. And while our current models continue to perform well, recent experience is pointing to some shortcomings that we need to address.