Despite the upward revision to the inflation forecasts, the repurchase rate was maintained at 5,5 per cent at the most recent MPC meeting in May. This is essentially due to the large influence of exogenous factors on current and projected inflation trends.
Considering the relationship between the price outlook and the output gap in light of the Phillips curve, in order for the year-on-year rate of increase in the CPI to reach around 2 percent, it is necessary that the rate respond relatively clearly to an improvement in the output gap – that is, the steepening of the slope – and that the Phillips curve shift upward, reflecting a rise in medium- to long-term inflation expectations.