Inflation has risen slightly in most countries, owing mainly to the increasing oil price. But excluding oil, inflation has not risen at the same rate. There are plenty of spare resources in several of the biggest economies, and in recent years competition has toughened in many industries. As a result, international inflation is forecast on the whole to be relatively moderate in the coming years. The economic situation in the US and the euro area In the US the economic situation is continuing to improve. In the fourth quarter last year GDP in the US rose by 0.8 per cent compared with the previous quarter, partly due to a sharp increase in investment. This reflects a benign investment climate in the US with historically high profits and optimism among firms. Indicators of growth prospects for the fourth quarter provide a positive picture of the activity level in the US economy. As resource utilisation has picked up the Federal Reserve has raised its key policy rate from 1 per cent to 2.5 per cent. Many factors suggest that we can expect the tightening to continue in the spring. Inflation is estimated to rise in the period ahead, partly because the weakening of the dollar in recent months has made US imports more expensive. In the main scenario of the Riksbank’s most recent Inflation Report the US economy is expected to continue to perform strongly in 2005 and 2006.
We recognize that timely and accurate information about our region, which is highly valuable to us, can also help to reduce uncertainty and inform the economic and financial decisions of regional residents, businesses, communities and governments. To that end, we make our various regional measures and analysis available to the public through our website and a variety of outreach activities. These activities include making presentations on topics of current concern to business and community organizations throughout the District. We welcome you here today to brief you on our views of the current state of activity and employment in the regional economy and to review the rich portfolio of resources that we make available to help monitor economic conditions across the region. 2  BIS Review 49/2010