In many industries, including the airline industry, where price competition is strong, low profitability has led to an increase in prices. High oil prices have also resulted in increased prices, for example for transport services. On the basis of the pay increases agreed upon in this year’s wage settlement, combined with the estimates for wage drift and wage carry-over, annual wage growth is projected at around 3½ per cent this year. Lower-than-projected wage growth may be related to the fact that there were few signs of improvement in labour market conditions prior to this year’s wage settlement. Lower-than-projected consumer price inflation last year may also have contributed. Low wage growth will in turn contribute to curbing the rise in prices for domestically produced goods and services. Prices for imported consumer goods have continued to fall. The decline in prices may reflect high productivity growth in the production of some goods and large investments to increase production capacity, particularly in China. This has led to strong competition and a low rise in prices for internationally traded goods. The shift in imports, for example clothing imports, towards low-cost countries seems to be substantial again this year. Structural changes in world trade have been important for the Norwegian economy, not least for the rise in prices for imported goods and services. The shift in imports towards low-cost countries has come gradually.
These arguments that were compelling at the dawn of central banking are most likely to ensure that modern payment systems continue to have a determined impact upon monetary policy and a positive influence upon the stability of the financial system as whole. Thank you for your attention. BIS central bankers’ speeches  3