As a result, we have favourable growth, low inflation, a large current-account surplus and a surplus on government finances. Unemployment is low in international terms. After rising for two years the curve seems to be on the way down as the unemployment level has stabilised, or is dropping slowly, depending on whether people in job creation schemes are included or not.
Still, core inflation needs to continue to decline for total CPI inflation to get back to the 2% target. Regarding expected inflation, our surveys indicate that fewer households and businesses think inflation will stay high for a long time, but short-term inflation expectations remain elevated and are above our own inflation forecast.