Chris

Yes, a lot of people forget that inflation is measured as year-on-year cost of living increases, so if the costs of goods and services continue to go up, inflation remains high. But if part of the underlying cause of high inflation was temporary volatility, such as in the cost of oil and gas, as has been the case here, then a year later if that volatility has settled down it drops out of the calculation. So it might seem quite dramatic to forecast inflation that low by the end of this year, but unless oil and gas skyrocket again they won’t be exerting inflationary pressure on the economy any more so it’s not as surprising as it looks.