With the drag from the housing sector waning, the growth of employment and income should pick up and support somewhat larger increases in consumer spending. And as long as demand from domestic consumers and our export partners expands, increases in business investment would be expected to broadly keep pace with the rise in consumption.
4  BIS Review 133/2007  Such developments would not be likely to fuel a rise in inflation expectations or in actual inflation. Sizable increases in energy and food prices have contributed to a pickup in headline inflation this year, but the developments on core inflation (which excludes prices for food and energy items) have been moving in a more favorable direction.