  Thirdly, the output gap may be closing faster than anticipated – not to mention the measurement problems attached to that leading indicator of inflation. As the economic recovery continues, there are new indices, which we will have to follow closely. For example, capacity utilization is coming back very rapidly to normal.
In accordance, the European Commission’s February 2011 surveys in the manufacturing sector have shown a particularly steep rise in selling price expectations to a level even surpassing the 2008 peak. Spillovers to producer prices and producer prices of consumer goods are only a question of time. Moreover, the momentum for structural reform to lift potential growth is still a bit lackluster.