With WPI inflation ruling above 9 per cent, we are way past the threshold. At this high level, inflation is unambiguously inimical to growth; it saps investor confidence and erodes medium term growth prospects. The Reserve Bank’s monetary tightening is accordingly geared towards safeguarding medium term growth even if it means some sacrifice in near term growth. Monetary policy behind the curve 13.
The focus now needs to be on the future and on normalising the situation in the best and quickest way possible. Let me ask you a question here, because we know that at some point there was a bit of tension between our prime minister and yourself, especially in that famous meeting in Brussels. Is there still some tension in the air?