This sharp increase in prices, however, is attributable mainly to base effects and the higher oil prices of late – since the end of November, 1/9  BIS central bankers' speeches  oil has become significantly more expensive. Assuming that oil prices do not rise any further, I see two notable developments.
Moreover, while there may be limits to how much households can bring forward future income in response to lower borrowing costs, governments can in principle raise their future income through their spending today. This is the case if government spending raises productivity and thereby future potential output, which increases fiscal space today. [43] Higher expected growth in turn makes private sector transmission more effective.