These reflect some common drivers: •  A strong run-up in world commodity prices, which have had a direct inflationary impact. Oil prices increased nearly tenfold in USD terms in the decade to July 2008, with global food prices also rising strongly. Prices of the milk, cheese and eggs category rose 18 percent over the last year.
•  The long-running expansion in domestic demand contributed to a build-up of pressures on capacity and high rates of domestically generated inflation. So far, weaker demand conditions have been slow to feed through into lower domestic inflation. In the building industry for example, rising prices for raw materials and strong wage inflation have continued to underpin high rates of construction cost inflation.