Today, though, I would like to focus on the outlook for household spending, which is closely linked to the housing market and the prospects for growth in household income. Before I do that, I would like to touch on one related uncertainty that we have been paying attention to – that is the supply of credit.
The overall effect of this process is likely to be reflected in a lowering of the risk premium embedded in interest rates charged to SMEs with positive spillovers for bank lending to the SME sector. Although liberalisation of financial services and competition has improved customer services, experience shows that customers' interests are not always accorded priority.