These challenges vary around the world, reflecting differences in country-specific shocks, the extent of the spillovers from these shocks, and the way individual economies respond to common shocks.
The recent moderation in core inflation is consistent with the persistence of significant excess supply and a deceleration in the growth of unit labour costs.   The Bank judges that the output gap is slightly larger and that the economy will return to full capacity by the end of 2012 rather than the beginning of that year, as had been anticipated in July.