Cross-checking with the monetary analysis also supports the case for strong vigilance with regard to the materialisation of risks to price stability. Let me also address the current evidence on fiscal developments, where the latest budgetary notifications are a source of concern.
However, to the extent that firms are able to find further cost-cutting measures as output expands, they may delay hiring. Other factors will affect near-term employment growth as well. Business confidence in the durability of the expansion, for example, will help determine employers' willingness to hire.