significant forecast errors by major professional forecasters, central banks and policy institutions since the start of the pandemic. disentangling the “ signal ” on headline inflation from the “ noise ” has become increasingly difficult. underlying inflation measures have therefore become an important pillar in assessing the inflation outlook and risks. [ 9 ] these measures aim to capture more persistent price developments ( for instance, by excluding more volatile items from headline inflation ) to provide a clearer signal for medium - term inflation developments. however, a key challenge is that the standard set of measures of underlying inflation continue to be contaminated by past energy shocks, supply disruptions and reopening dynamics. since the start of the pandemic, the accuracy of both headline and core inflation projections one or two years ahead has in fact deteriorated significantly. each indicator has its advantages and disadvantages and the performance of different measures can change over time. it is therefore important to monitor a wide range of indicators of underlying inflation. that said, there are currently two clear messages. first, while underlying price pressures remain strong, most indicators have started to show some signs of softening. second, while still wide by historical standards, the range of measures of underlying inflation recently began to narrow. this suggests that the unusually high level of uncertainty around the downward trajectory of inflation over the medium term has started to ease somewhat. a closer look at some of these indicators however, reveals that some are levelling off only recently. as the indirect effects of past energy price shocks and other pipeline price pressures gradually fade, labour costs – an important component of prices in the services sector – are becoming a dominant driver of inflation. wage pressures are rising and we have factored strong wage growth into our inflation projections. compensation per employee rose by 5. 2 % year on year in the first quarter of 2023 and is expected to continue to grow strongly in the coming months. at the same time, firms in some sectors ( such as trade, transport, accommodation and food ) increased their profits, especially where demand outstripped supply. [ 11 ] looking ahead, this may offer firms room to absorb the impact of wage increases on prices as other input costs moderate. the june 2023 eurosystem staff projections assume a downward trajectory for firms ’ profit margins along these lines. given the crucial role of labour costs in the outlook, we are closely monitoring inflation dynamics in the services sector where these costs play a particularly important role. the ecb ’ s monetary policy response in response to the

eddie yue : remarks at media standup remarks by mr eddie yue, chief executive of the hong kong monetary authority, at the media standup, hong kong, 7 july 2023. * * * today i would like to announce that, after careful consideration, the hong kong monetary authority ( hkma ) has decided to adjust the countercyclical macroprudential measures for property mortgage loans. since the measures were implemented in 2009, the hkma has been closely monitoring market conditions, including property prices and transaction volumes, and the local and external economic environment, with the aim of evaluating the need for appropriate adjustments to the measures to ensure that banks manage the risks over their property mortgage lending business effectively, and have sufficient capacity to cope with challenges from a sharp correction in property prices. following the covid - 19 pandemic and with interest rates rising, there has been a correction in housing prices in hong kong since 2022. despite a rebound early this year, market data showed that at the end of june housing prices were down 13 % from their peak in 2021. the situation in the non - residential property market was similar. the prices of offices, flatted factories and retail premises fell by 20 %, 8 % and 17 % respectively from their peaks in 2018 - 2019. externally, as major economies continue to face high inflationary pressures, interest rates may remain elevated for some time. any slow - down in the global economy due to high interest rates would inevitably affect the local economy. taking all relevant factors into account, the hkma has decided to make several adjustments to the countercyclical macroprudential measures for property mortgage loans, while continuing to maintain banking stability and ensuring the proper risk management of property mortgage loans. these adjustments include : adjusting the maximum loan - to - value ( ltv ) ratio for self - occupied residential properties. the maximum ltv ratio for residential properties with a value of hk $ 15 million or below will be increased to 70 %. for properties valued at more than hk $ 15 million and up to hk $ 30 million, the maximum ltv ratio will be increased to 60 %. for residential properties with a value above hk $ 30 million, the maximum ltv ratio will remain unchanged at 50 %. to avoid a sudden drop in applicable ltv ratios, ratios for properties in certain value ranges will change gradually. the maximum ltv ratio for non - self - use residential properties will remain unchanged at 50 %. increasing the maximum ltv ratio for