, activity is entering an upward phase and economic policy ’ s impact on the economy is expansionary, then monetary policy ought to contribute to a somewhat lighter foot on the accelerator. but if most of the unduly high inflation stems from transient increases in the price level and if an economic upturn is not yet assured, it may then indeed be advisable to somewhat defer an upward adjustment of the instrumental rate. it is likely to be around these and other aspects that our deliberations at the riksbank will circle when the executive board finally adjusts the coming inflation report and next discusses monetary policy on 18 march. that is still almost a fortnight ahead and some more statistics are due to be published. in the meantime, the six of us on the board will have to form our opinions step by step and decide whether there is to be some increase in the repo rate already in march or whether it is possible to go on waiting. personally i share the concern about inflation prospects that a number of my colleagues have expressed in speeches recently.

things, excludes mortgage interest costs. the june inflation report in 1999, for instance, illustrates how und1x was used to clarify the formulation of monetary policy. when the repo rate was left unchanged on this occasion und1x inflation was forecast to be close to 2 per cent towards the end of the forecast period while cpi inflation was expected to be considerably below target. the problems we encountered in communicating monetary policy, which arose in conjunction with the substantial rate cuts during the second half of the 1990s, were also a significant reason for the riksbank's decision in 1999 to publish a clarification of the formulation of policy and the application of the inflation target. 1 among other things the clarification specified the situations in which there may be reason to deviate from the simple rule of aiming policy at meeting the target of 2 per cent cpi inflation one to two years ahead. my discussion today is based on exactly the same line of reasoning as in that clarification. the second example is taken from spring 2001. higher food and energy prices due to foot and mouth disease and mad cow disease, as well as supply shocks in energy production, caused a sharp rise in cpi inflation. the price increases were judged to be temporary, and the riksbank decided therefore not to raise the repo rate. as the prices rises were estimated to disappear from cpi inflation relatively quickly, there was no need in this case to depart from the bank's simple rule of monetary policy. however there was a need in our external communication to illustrate clearly the assessment that it was mainly transitory price increases that had caused cpi inflation to be so high above target. consequently, to this end, the june inflation report in 2001 presented an inflation measure that was see heikensten, l, " the riksbank's inflation target - clarifications and evaluation ", sveriges riksbank quarterly review 1, 1999. adjusted to exclude temporary rises in prices. on that occasion there was no forecast for this adjusted measure. the third and most recent example is when the riksbank decided last year to highlight und1x excluding energy as an especially important index for assessing longer - lasting inflationary pressures. energy prices had risen steeply around the turn of the year 2002 / 2003. we judged this rise to be temporary and expected energy prices to fall back again. this meant that the inflation rate would come to be affected for a reasonably long period by these temporary fluctuations in energy prices. at