However, non-mining sector performance could be weighed down by the limited domestic fiscal stimulus, as nominal government expenditure is only budgeted to increase marginally (0.1 percent) in 2012/13 and nominal personal incomes will continue to be sluggish. This outlook was also reflected in the fall in business confidence indicated in the recent (September 2011) Business Expectations Survey.
The impact of asset purchases on market prices is likely to depend critically on how these purchases are communicated to the market. The fact that we chose to communicate, as part of our forward guidance, and from the very beginning, an expectation of the intended horizon of APP purchases is likely to have been a key determinant of the success of the programme.