In addition, new labour market statistics show that seasonally-adjusted unemployment amounted to 8 per cent in August. The next Monetary Policy Report will not be published for a while yet, but at the Riksbank we are already working with new analyses and forecasts. Ahead of the monetary policy meeting on 23 October I will weigh these factors against each other, but also take account of any additional information that becomes available before then in order to arrive at a new assessment. 10  BIS central bankers’ speeches  Figure 8 Low but gradually increasing inflation CPI and CPIF, annual percentage change 5  5 CPIF  4  4  CPI  3  3  2  2  1  1  0  0  -1  -1  -2  -2 07  09  11  13  15  Note. The CPIF is the CPI with a fixed mortgage rate Sources: Statistics Sweden and the Riksbank  Good development in the short term, sustainable in the long term I hope that in my speech today I have been able to convey my thinking on monetary policy at the two latest monetary policy meetings and how I view the current situation. The repo rate is low at present. The Riksbank’s forecasts show that inflation will reach 2 per cent within the forecast period at the same time as resource utilisation will improve. Although the global economy is weak at the moment, the preconditions for a recovery are in place.
Economic activity improving When it comes to the prospects for higher demand from the euro countries following the debt crisis and all the structural problems, I have become gradually less pessimistic over the last 12 months. This is for example because several highly-indebted countries have made progress in reducing their budget deficits. The Swedish crisis of the 1990s made a great impression on me as an economist and my experience from that period tells me that when households and companies see that the worst problems are over and that the situation is being managed then there is potential for increased confidence about the future, which we have also seen in recent months. This is despite the fact that unemployment is still high and that the recovery of economic activity in these countries is starting from a low level. Of course a lot remains to be done and here the responsibility primarily lies with the politicians in the respective countries. The euro area’s common monetary policy is an important tool for easing the readjustment, but it cannot correct all the causes of the crisis. This requires decisions at the national level in order to come to terms with weak public finances and to change economic and political structures so that competitiveness is improved. It has long been the Riksbank’s assessment that the crisis can be resolved in an orderly way and that economic growth will gradually improve.