In addition to these business cycle developments, structural aspects that may be linked to factors such as globalisation, technology and demography can also have major impacts on economic growth and inflation. In normal times these structural aspects move relatively slowly. However they are important in determining how interest rates might affect inflation and the cycle in output and can move sharply in a crisis.
All of these factors can affect the neutral interest rate, potential output and inflation expectations.13 If financial market participants understand the conditional nature of our forecasts, the 90-day interest rate projection can help participants understand how we are likely to respond to changes in the economic outlook. Every three months we provide a new projection for the 90-day interest rate.