The demand for goods and services, in turn, depends on future income and real interest rate expectations. According to modern understanding, the effects of monetary policy are also largely transmitted through expectations of future inflation and of future interest rate levels, and monetary policy can be perceived as being an instrument of exerting influence on the expectations of the public and the market.
According to the Bank’s quarterly Opinion Survey on the General Public's Views and Behavior conducted in June, more than 90 percent felt that prices have gone up. Since the public's perception of inflation affects the actual inflation rate through inflation expectations and changes in the price-setting behavior of firms, it needs to be monitored carefully along with developments in energy and materials prices.