Within this, the precise coping strategies taken will vary across the economy’s sectors, depending on the particular shape of domestic and external forces playing out in each. None of this will be easy.
They relate mainly to emerging capacity constraints and, closely related, stronger than expected wage dynamics, which would pose significant upside risks to price stability. In addition, pricing power in market segments with low competition may increase in such an environment. It is therefore crucial that all parties concerned meet their responsibilities.