Despite weak demand, inflation is above the 2 per cent target. The slack in the economy is likely to reduce inflationary pressure, but it is possible that rising import prices and commodity prices...

Despite weak demand, inflation is above the 2 per cent target. The slack in the economy is likely to reduce inflationary pressure, but it is possible that rising import prices and commodity prices will push up inflation and inflation expectations.

Source: Bank of England, 10 November 2010

Explain this report in terms of shifts and movements along the short-run and long-run Phillips curves.