For this reason, the Bank uses core inflation as an operational guide. By focusing on the more stable components, the Bank can get a better fix on the underlying trend in inflation.
This is important because monetary policy operates with long and variable lags, and any attempt to control short-term movements in inflation is likely to prove counterproductive, destabilizing both inflation and real economic activity. Our experience in Canada has shown that core inflation is a better tool for discerning inflation trends than is total CPI.