Somewhat simplified, the income comes from two main sources: remuneration to the labour force in the form of wages and other benefits and remuneration to capital in the form of yield and profits. Both of these types of remuneration have increased over the past three years, and GDP has increased by a good three per cent on average in  4 See, for instance, OECD (2015) and Furceri et al. (2016). 6 [14]  real terms. 5 But the question is how the growing incomes have been distributed among households. Households differ with regard to the size of the income they receive from different sources. In general, labour income is in relative terms the most important source of income for households in the lower and middle parts of the income distribution, while capital income has the most significance for those at the top – particularly the very top – of the distribution. As monetary policy affects wages and capital income in different ways, the overall effect may differ from one household to the next. It is this channel from monetary policy via the composition of household income on which the debate has focused the most – rising asset prices should have benefitted households at the top of the income distribution to a relatively large degree and thus contributed to a greater income dispersion. Higher asset prices, lower yield and cheaper loans However, households do not only differ with regard to the composition of labour and capital income.
We expect largely unchanged unit labour costs over the next three years due to low wage increases and rising productivity. We also expect the Swedish krona to continue to strengthen (Figure 22). This will mean that inflationary pressure will be low during the forecast period. Repo rate at all-time low At the monetary policy meeting in December, the Riksbank decided to maintain the repo rate at the all-time low of 0.25 per cent, standing fast by its previous assessment that it will not be necessary to raise the repo rate until the autumn of 2010 (Figure 23). The background to this decision is that a low level of resource utilisation, together with a slow development of prices and wages, is expected over the next three years. In order to meet the inflation target and to support economic recovery, the repo rate must remain low for a long time. This is the same repo rate path that we adopted as long ago as July. Since then, the forecasts for GDP growth and employment have certainly been revised upwards. The forecast for resource utilisation has accordingly been revised upwards. However, at the same time, the forecasts for inflation have been revised downwards. These two changes largely cancel each other out as regards their effect on monetary policy. Wage formation has functioned well for more than a decade Wage formation has functioned well over the last ten to fifteen years. The development of wages has been compatible with low and stable inflation.