Update on oven temperature testing. I tested again, from cold, with oven set to 160c. This time, the light went off early when my thermometer only read 140c. However, by about a minute later, the thermometer reached 160c. From then on, it went up to 170c but no further and would then fluctuate back and forth between 160 and 170, with the thermostat light coming back on as it dropped slightly past 160.
I reduced oven setting to 150 and same thing, fluctuating between 150 and 160.
Having read up on this, this tolerance is apparently quite normal even for a well calibrated oven. So if my recipe calls for 200c, should I set my oven to 190c knowing that it will fluctuate up to 200, or put it at 200c?
I found this from an appliance manufacturers page
Gas and electric ovens will cycle on and off throughout the cycle to maintain the set temperature. When the oven temperature has dropped below the set temperature, the oven cycles on again to heat and will then cycle off again once it is higher than the set temperature. The goal is to maintain an average set temperature, but you will see a normal swing in temperatures throughout the cycle. This is typical of ovens, and is factored into how recipes are created and used.