00:00I really believe, and actually I believe even more now, I've seen the sort of the data over the last
00:04couple of months,
00:04that we would have been back at our 2.0 target around about April-May time.
00:10So the fact that we aren't is hugely frustrating.
00:14Is it all because of the war?
00:16I think so, yeah.
00:17And we've had obviously, so we're going to increase.
00:19So inflation in the UK is at 2.8 at the moment.
00:22I expect it will go a bit higher than that because we have this sort of lagged response with the
00:27household energy price cap mechanism.
00:28So, you know, at the moment, I think we think it could go up to 3.2, somewhere like that.
00:34That will be quite a bit later this year, though, because of the lag in the adjustment.
00:38So should you raise rates to get out of it?
00:39Well, that's the thing.
00:41So I would say, first of all, we're looking at obviously, you know, how long have we got a sort
00:46of lasting settlement now?
00:48Is it going to be stable?
00:50How much damage is...
00:51Who knows, right?
00:51Yeah, that's highly uncertain.
00:53How much damage has been done to the supply infrastructure?
00:57And then the question of, you know, what are the indirect effects in terms of how it's going to pass
01:01through to things like food prices?
01:03And then what are the second round effects in terms of how is it going to get embedded in the
01:06economy now?
01:07At the moment, first of all, it's coming in lower than we thought it would, which is obviously encouraging.
01:13I'm encouraged by that.
01:14Thank you.
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