This tendency has been taken into account in the projection for prices mentioned earlier, but the sensitivity of prices may turn out to be lower than assumed in the projection. If, despite prolonged economic expansion, wage growth were to remain low relative to the pace of productivity gains, downward pressure on prices from labor costs would persist.
Moreover, if the positive influence of the strength in the corporate sector feeds through into the household sector slower than expected due to sluggish wage growth, supply and demand conditions for consumer  4  BIS Review 46/2007  goods and services may not improve in line with the diminishing slack in the economy.