, over the past year the uk housing market has returned to prefinancial crisis levels of activity and rates of price growth. public and banking sector support has played a huge part in this. furlough schemes and interest payment holidays have limited distressed sales through the covid crisis, which would otherwise have pushed down on house prices. in addition, a combination of pent up demand from the initial lockdown in which the uk housing market was closed and the substantial tax incentive provided by the stamp duty holiday - which was announced in july all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice and which will be tapered out over the course of this year – has fuelled the strength in demand for housing. after an initial tightening, credit conditions have dropped back broadly to pre - covid levels. one would expect the market to cool down when public support to the economy in general and the housing market in particular is withdrawn over the course of the year, as is currently planned. previously, we ’ ve seen transactions spike prior to the end of stamp duty holidays, followed by a brief trough before transactions start to recover, consistent with a large share of the impact coming through shifts in the timing of transactions, rather than an aggregate increase in demand. 20 but there may also be some reasons to believe that the recent increase in demand for housing, and perhaps the composition of that demand, which has driven the uk market in recent months reflects some more persistent drivers and that the market will not fall back to its pre - pandemic decade performance when the tax incentives have gone. a survey conducted by nationwide in april found that, amongst homeowners moving or considering a move as a result of the pandemic, three - quarters of them said they would still be moving or considering moving even if the stamp duty holiday hadn ’ t been extended. moreover, the stamp duty holiday in scotland has already come to an end with no material drop - off in demand. there has been a clear shift in attitudes towards remote working – both by employees and employers - as a result of the pandemic. according to the understanding society covid special survey, half of respondents who have been working from home during the last year report wanting to work from home often or always once social distancing measures end, compared to just over one in ten prior to the pandemic. the bank ’ s decision maker panel also suggests that employers

in a basket of goods and services consumed by an average swedish household. as interest costs and indirect taxes included in cpi inflation are not assessed to have a long - term effect on inflation, the riksbank has chosen to normally focus on und1x, which is an index that excludes these factors. from time to time there may also be reason to disregard other price changes that are assessed as temporary. our ambition will then be to make it clear that we have done so. by raising and lowering the steering interest rate - the repo rate - the riksbank attempts to influence inflation. as it is so difficult to steer inflation in the short term, the riksbank makes an assessment of developments for the coming 1 - 2 years. this is the period of time usually assumed necessary for an interest rate adjustment to work its way through the economy and have a full impact on the rate of price increase, i. e. inflation. the riksbank uses a simple rule - of - thumb when shaping its monetary policy. if the total picture of inflation shows that it is expected to be above or below the target level, the steering interest rate is adjusted accordingly. there are four main factors in the analysis of future inflation that stand out as central to the shaping of monetary policy : the development of total resource utilisation, international price trends, the exchange rate and the general public ’ s inflation expectations. inflationary pressure varies according to the demand situation and to changes in resource utilisation. the stronger the upturn in demand in relation to potential production, the greater the risk that prices and wages will rise rapidly and vice versa. this is why we who work in central banks around the world must analyse the picture of economic activity as a whole, despite the fact that inflation is our target variable. international price trends, where, for instance, oil prices are an important factor, affect domestic inflation by way of imports. an assessment of international resource utilisation can provide an indication, for instance, of how international prices may develop. the development in the value of the krona is important in the assessment of inflation. a change in the exchange rate has a direct effect on inflation in that the price of imported goods and services is affected, and also an indirect effect via aggregate demand. if the value of the krona changes in relation to other important trading currencies, this affects the competitiveness of swedish goods and services and thereby demand and resource utilisation. inflation expectations among households