on Consumer Prices and Wages
In tandem with
the improving economy, job creation resumed in Q3
2009 after two quarters of net losses. Meanwhile,
the CPI, which had fallen sharply in H1 2009 against
the backdrop of lower global commodity prices and
reduced business costs, turned around rapidly and
rose over the next three quarters. This was due to
elevated utility and fuel costs, as well as higher
car prices (Chart 2). For the whole of 2009, CPI inflation
came in at 0.6%.
higher global commodity prices and elevated car prices
are expected to continue pushing headline inflation
up for the rest of 2010. At the same time, with the
economy set to remain at relatively high levels of
activity, rising business costs could put upward pressure
on the prices of a wide range of goods and services.
Thus, headline inflation is forecast to rise to between
2.5% and 3.5% in 2010.