Further, we do not yet know the full extent of the economy’s reaction to various macroprudential measures aimed at imbalances in the housing market. So, the Bank will be looking closely to see how the economy’s adjustment to changes in interest rates may differ from that in previous economic cycles. This is not an exhaustive list.
There are also many external risks and uncertainties around our outlook, including geopolitical developments and the rise of protectionist sentiment in some parts of the world. The evolution of the neutral rate of interest is also a topic of significant debate in the profession. We have been talking about these uncertainties for some time.