With regard to the second channel, there is concern that a rise in prices, mainly for essential goods such as energy and food, may affect lower-income households in particular, as they are more susceptible to a decline in purchasing power. Chart 8 shows developments in the terms of trade.
But even the underlying measures, which remove or down-weight such effects, at around 2 per cent, are low. Price rises for non-tradeable items  BIS central bankers’ speeches  1  are at their lowest for many years, and this reflects, among other things, the modest growth of labour costs.