Long-term inflation expectations derived by break-even rates have also picked up over the past weeks resuming their upward trend observable since last summer. This is more visible for long-term inflation expectations derived from financial market prices than from those derived from surveys. On the other hand we took into account that the prospects for global growth have become somewhat clouded.
If not reversed, these developments, together with the likelihood that economic activity will fall short of potential for a time, should bring inflation down to levels consistent with price stability. Over time, a number of factors are likely to promote the return of solid gains in economic activity and employment in the context of low and stable inflation.