In the third quarter, inflation developments were marked by the downward dynamic of energy prices and the persistence of moderate rates in services and industrial goods. The annual rate of change in the harmonised index of consumer prices (HICP) held steady at 1% in August, for the second month running, while underlying inflation, which excludes energy and food prices, stood at 0.9%. In fact, since 2013, inflation in the euro area has stood on average at 0.9%, practically half the level observed during the first 10 years of EMU, of 2.1%. In parallel, the indicators of long-term inflation expectations, based on financial market information, have fallen sharply since the end of last year and stand at very low levels, which broadly coincides with the signals obtained from surveys. These indicators are regularly used to monitor the degree to which inflation expectations are anchored to the ECB’s medium-term inflation target (below, but close to, 2%). Although most of the reduction in inflation expectations, according to market indicators, seems to stem from the fall in the inflation risk premium, the level of this premium is in negative territory, which would indicate that agents are hedging the risk of very low or even negative inflation rates. This absence of inflationary pressures and the weakness of demand, along with expectations of falling oil prices and a deteriorating global environment, led to a further downward revision to the Eurosystem inflation projections.
Given this, it is interesting to reflect on why we Swedes prefer to pay by cash rather than by card more often than our Nordic neighbours. The number of card transactions per inhabitant in 2003 was around 130 in Norway, just over 100 in Finland and Denmark and just over 80 in Sweden. There is no clear explanation for this,  2  BIS Review 33/2006  but one clue may lie in pricing. In Sweden, cash withdrawals from all ATMs are free of charge, despite the large costs entailed in cash handling. In the other Nordic countries, cash withdrawals are only free of charge from the customer’s own bank’s ATMs, which has led to a reduction in the use of cash. The Riksbank’s opinion is that to achieve the best possible efficiency with regard to payments, the respective means of payment should bear its own costs and those who make the payments should be aware of these costs in order to make rational choices. However, it is important to be aware that increased card usage would only have a marginal effect on the number of cash transports. It would therefore be no solution to the problem of cash transport robberies. I hope that we can together bring up these issues onto the agenda and contribute to constructive solutions. The security surrounding cash transports can itself be improved in various ways, but it should be emphasised that this entails much more than security cases and bullet-proof glass.