- Some indicators of underlying inflation have been driven higher by energy shock
- Firms are getting ready to pass on higher input prices
- Households in solid financial position
- Consumption is a driver of growth
- The conflict is weighing on activity
- Domestic demand weaker than projected in March
- Most measures of inflation expectations stand at around 2%
- The drag on growth would worsen if shipping remains closed
- Inflation risks are to the upside
- Financial conditions tighter than before war
Downside growth risks and upside inflation risks aren't a good mix.
Comments in the Q&A:
- Decision was unanimous and we did not debate any other proposal
- Under the present situation, there is no forward guidance
- There will be no pre-set rate path
- Services inflation has moved to 3.5% from 3.0%
- We need to better understand what part of that is indirect and direct from energy
- Haven't yet seen second-round effects
- We are not in that "let's see through it" phase on war inflation
- Today's decision not "a forceful one"
