The inflation outlook remains favourable: in May it measured 4,6 per cent, and we expect inflation to remain within the target range for the remainder of the forecast period, but our forecasts are that it will begin to rise moderately by the fourth quarter of 2010.
This outlook has enabled us to reduce the repo rate to its lowest level in nominal terms at 6,5% since the late 1970s. Unfortunately, despite positive growth, employment continues to lag. This is not unusual in the early phases of the cycle, but there are other factors that seem to indicate that the pickup in employment is likely to be slow.