The UK consumer prices index in September was 6.5% above the level implied if the MPC had achieved an average 2% inflation rate since the target was switched to the CPI in December 2003.

The previous target was for 2.5% RPIX inflation (i.e. retail prices excluding mortgage interest). The September level of RPIX was 7.8% above the level implied by an average 2.5% inflation rate since December 2003.

The MPC’s claim that this overshoot was unavoidable and outside its control is wrong. Monetary policy determines the inflation rate over such a long period.

The MPC’s claim is undermined by the superior inflation performance of other countries similarly exposed to rising international input costs. Eurozone consumer prices, for example, are only 0.8% higher than the level implied by a 2% annual rate of increase since December 2003 (i.e. Eurozone inflation has averaged 2.1% since 2003 versus 2.8% in the UK).