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Pill asked about risks to persistence (but doesn't really answer the question)

BOE
  • Pill asks about risks to persistence and how they have moved.
  • Pill says we focus on persistence before we have to be forward looking. So what matters is the bit of inflation that is still here in 18-24 months time. We have seen good news on headline inflation - it has fallen maybe slightly more rapidly than expected- and will come to close to 2%. (He then cites the energy price cap).- So what is the persistent level of inflation and how restrictive does policy need to be? Thats where the MPC's framework is key. That says in principal we would like to use a model to extract what is statistically relevant - but that is very difficult. So in practice focus on 3 indicators (those that have been cited before). Crucially these are all domestic, so not impacted by e.g. Gas prices and can be impacted by monpol.- Says that young people don't answer their phones or open their doors to statisticians - causing problems in labour market data.- Point to emphasis: "Don't get overexcited headline inflation could fall to or below 2%." Trying to work out underlying, more lasting impacts.
  • (So in essence he didn't ask the question on where the risks were outside of the general risks to persistence).
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