Lower borrowing costs for firms and households have stimulated both consumption and investment. For example, household income is benefiting from lower interest rate expenses. Likewise, investment spending benefits from lower financing costs, which are making more investment projects profitable. Supported by our monetary policy, the recovery is sustaining its momentum. We also expect headline inflation to continue rising over the coming months.
Underlying price pressures are expected to increase somewhat this year, owing to short-term supply constraints and the recovery in domestic demand, although they remain subdued overall, in part reflecting low wage pressures, in the 2/4  BIS central bankers' speeches  context of economic slack, and the appreciation of the euro exchange rate.