For a long time low inflation and moderate wage increases have been the order of the day in Denmark, just like in many other countries. This phenomenon is among other things the result of growing recognition of the favourable economic effects of low inflation.
Low unemployment combined with continued robust growth in the demand for Danish goods entails a risk of the pressure on the labour market leading to higher inflation. It is well-known that this can cause unemployment to rise at a later stage. Although this is not considered to be the most likely course of events, the risk of detrimental overheating of the economy is growing.