*  *  *  Ladies and Gentlemen, 1 It is a great pleasure for me to be given the honour of addressing a few words to you on the occasion of this year’s award ceremony of the Bernácer Prize to Professor Markus Brunnermeier from Princeton University.
Although headline inflation declined in recent months, average annual CPI inflation is forecast 2 to be 6.9% in 2008, about 2 percentage points higher than the average annual inflation rate in the previous year and the inflation target set at the beginning of 2008.