First, the revised Building Standard Law, which came into force in June last year, has been pushing down housing investment significantly. Second, the elevated prices of materials such as crude oil have been reducing profits, especially at small firms. And third, the subprime mortgage problems have been generating increased uncertainty about the future course of the world economy.
BIS Review 2/2007  1  In the Governing Council’s view, the outlook for price developments remains subject to upside risks, stemming in particular from a stronger than anticipated pass-through of previous oil price increases, increases in administered prices and indirect taxes beyond those announced thus far, and the possibility of renewed oil price increases.