It should be emphasised here that when financial markets are not fully integrated, not only does this imply substantial economic cost in terms of a less efficient allocation of financial resources, which consequently limits opportunities for economic growth in Europe, but this can also be associated with financial risk.
It is expected that inflation could breach the upper end of the target range in the final quarter of 2011 and to peak in the first quarter of 2012 at around 6.2 per cent, but then to return within the target range in the second quarter. In the final quarter of 2012, inflation is expected to ease to around 5.5 per cent.