But there is also increased competition in the provision of retail payment services, made possible through new technology, which is disrupting banks’ traditional business models. Traditionally, banks have offered payment services as an extension of a customer account – debit and credit cards, direct debits and the like.
Continued improvements in supply conditions and a further rotation of consumption away from goods and into services should also help by reducing price pressures in goods. With regard to non-housing services, the magnitude of price pressure over the next several quarters will depend on an overall slowing in spending as well as the extent to which labor supply improves in these sectors.