BIS Review 20/2005  3  expectations would become well anchored under targeting - and this also happened. Indeed, shortterm expectations quickly became anchored to our target, although longer-term expectations took a bit more time to fall in line. Together with marked improvements in Canada's fiscal position in the mid1990s, our excellent track record on inflation added to our credibility.
For a time, this increased income was used to rebuild saving, but with the household saving ratio having stabilised in recent quarters, income growth is now providing the wherewithal to fund consumption. The national accounts also showed that Australia’s GDP continues to be affected by the severe effects on mining activity of the floods over the Australian summer.