If people actually experience a rise in prices, inflation expectations are supposed to change substantially. The Bank holds the view that, due to a backwardlooking element together with a forward-looking element, inflation expectations will continue on a rising trend, gradually converging to around 2 percent – the price stability target.
While I have said that prices are expected to rise gradually, the Bank has been aiming at ensuring price stability and not by any means artificially creating inflation. A numerical definition of what the Bank considers price stability based on a specific price index is 2 percent in terms of the year-on-year rate of change in the CPI.