For the duration of the Guarantee this should reduce the risk that a long period of externally generated inflation leads to more persistent domestic price and wage pressures, although the MPC agreed that risk remained material. At the September MPC we also noted further signs of continuing strength of domestically generated inflation, that the labour market remains tight and domestic costs and price pressures including from businesses are elevated. Against that backdrop our initial assessment of the demand impact of the Energy Price Guarantee was that household spending was likely to be less weak than projected in the August report over the first two years of the forecast, and all else equal, relative to that forecast, it would add to inflationary pressures in the medium term. Since summer 2021, I’ve been highlighting my concerns about the build-up of inflationary risks[7]. A key consideration in my assessment of the risks that above target inflation persists is what happens to inflation expectations. I have already described how short term inflation expectations may be impacting on the immediate outlook for earnings. These could in turn feed through into prices given the high share of wages in costs, particularly in the services sector. And the same could happen if the current inflationary environment companies attempt to protect or increase their margins. Because shorter term measures of inflation expectations tend to move with actual inflation policymakers tend to focus on longer term measures.
In the inter-war years, the NBR played a paramount role in Romania’s economic reconstruction. As for the present, it is difficult to provide a self-description. Government authorities and public opinion might be in a better position to do that. Within the space of only two decades, the Romanian society underwent major changes. The future generations will judge what we did well and what we did wrong. During all these years, however, particularly since the start of reintegration and reconnection with the European Union, I can assure you that the National Bank of Romania made good use of its institutional expertise and took full advantage of the experience acquired ever since its establishment. I would like to mention that the NBR would not have managed to successfully accomplish its most complex tasks without the substantial contribution of its employees, namely the human  BIS Review 114/2010  1  resources it has created itself: employees, experts, managers. This is the reason why I want to extend my heartfelt gratitude to both present and former members of this high performance team for its professional qualities and integrity, as well as for their contribution to developing and enhancing the prestige of this institution, to the benefit of Romania.