CPIXE, a New Indicator of Underlying Inflation
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The operational target of monetary policy is annual consumer price inflation of approximately 2.5 per cent over time. In general, the direct effects on consumer prices resulting from changes in interest rates, taxes, excise duties and extraordinary temporary disturbances are not taken into account. Indicators of underlying inflation seek to remove movements in consumer prices resulting from temporary disturbances. The CPIXE is a new indicator of underlying inflation. This commentary discusses the sensitivity of the new indicator to alternative assumptions about changes in energy prices ahead.