At the same time, the level at which card payments become more efficient for society has probably fallen below SEK 70. But which of these figures has fallen furthest? This is something that we do not know. It is thus difficult to say whether consumers are still using more cash than is economically efficient. The Riksbank will follow up the previous studies to get a more exact picture of the use of cards and cash and of the economic costs of producing the different payments. Highlight the charges! It would not be so strange if consumers were to choose to make more cash payments than is economically efficient. In general, consumers have no idea of how much it costs to produce payments. Our survey shows that knowledge concerning what the different means of payment actually cost is limited. Some 20 per cent of the interviewees were unable to say whether it costs them more to use cards or cash. Some 45 per cent of interviewees believe that cash is most expensive for the retail sector and the banks. We already know that it is difficult to assess the costs of various types of payment. 5 They are never clearly disclosed. But the costs are there even if they are not apparent. The retail trade pays charges to the banks for cash and for card payment services, but does not usually price these services directly to its own customers.
In this respect, indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term. Risks to the outlook for inflation are broadly balanced. On the downside they relate, in particular, to the outlook for economic activity, while on the upside they relate to higher than expected commodity prices. Furthermore, increases in indirect taxation and administered prices may be stronger than currently expected owing to the need for fiscal consolidation in the coming years. Turning to the monetary analysis, the latest data confirm a continued deceleration in monetary dynamics. In May, the annual growth rate of M3 declined further to 3.7%, with that of loans to the private sector falling further to 1.8% – the lowest rates since the start of Stage Three of Economic and Monetary Union. This concurrent deceleration supports the assessment of a slower underlying pace of monetary expansion and low inflationary pressures over the medium term. In May, the outstanding amounts of most components of M3 showed a contraction, reflecting, to a large extent, the recent declines in interest rates paid on short-term deposits and marketable instruments and the increased allocation of funds to instruments outside M3 that these may have fostered. Following a substantial strengthening in April, the growth of M1, while having remained strong, also moderated in May. The short-term developments in M3 have been volatile over the past few months.