In addition, the Bank should also  2  BIS Review 41/2005  support the orderly activity of the financial system. At the same time it is important to specify that the Bank should support other objectives, such as growth and employment, as long as these do not undermine price stability.
When these price and wage setters expect higher inflation in the future, their actions make the expectations self-fulfilling: inflation duly rises and the risk of a wage-price spiral increases.