On the other hand, one can use a measure of underlying inflation, the CPIF, which excludes the direct effects of the repo rate on mortgage rates. Measured in terms of the CPIF, we expect inflation to be much more stable and to be close to 2 per cent for most of the forecast period. Figure 5. Inflation measured in terms of the CPI and the CPIF, annual percentage change 5  5 CPI  4  4  CPIF  3  3  2  2  1  1  0  0  -1  -1  -2  -2 00  01  02  03  04  05  06  07  08  09  10  11  12  Sources: Statistics Sweden and the Riksbank  There is still considerable uncertainty surrounding future developments (Figure 3). It is possible that the improved situation in the financial markets will contribute to a faster recovery in the world economy than we are expecting in the main scenario of the Monetary Policy Report. On the other hand, the recovery may be slower than expected when the fiscal policy stimulation packages around the world are gradually phased out. There are many potential risks along the way. But our forecast is that if we hold the repo rate low up to autumn 2010 and then begin raising it, this together with other measures will contribute to a stable recovery and mean we attain the inflation target of 2 per cent.
Creating the right conditions for this is a difficult but important task. It involves the work on both financial stability and monetary policy. It involves extensive reforms and cooperation between central banks and other authorities around the world. We must tackle this task not only at a national level, but also from a global perspective. The work has already begun, and we are in a phase of the crisis where there are good prospects for achieving change. It is now that we have the chance to really create something that will last and will work better. We must not miss this opportunity! 12  BIS Review 138/2009