As the output gap remains positive, various factors behind the weak developments in prices will  5  likely be resolved gradually. If that happens, firms' wage- and price-setting stance and households' tolerance of price rises will improve, and the pace of increase in inflation expectations will accelerate gradually. III. Conduct of Monetary Policy Let me now turn to the Bank's monetary policy.
Consumer and business confidence is rising, despite all the political uncertainties. That’s encouraging. After all the years of crisis progress is being made and people have trust in it. Is the upturn a result of the ECB’s low interest rate policy? In 2009 we had the biggest recession in the post-war era, with a sharp increase in unemployment.