The distinction between core and underlying inflation lies at the heart of the Bank’s current review agenda. However, Mendes pointed to easing input costs and softening rental markets as possible signs that underlying inflation could drift lower over time. Mendes cited cases where alternative core measures excluding these costs aligned more closely with the Bank’s inflation assessment. Beyond refining existing measures, Mendes said the Bank is exploring new tools, including multivariate core trend (MCT) inflation and machine-learning models. “Initial results look promising,” Mendes noted, particularly for identifying broad-based pressures that are more responsive to monetary policy.