rates. this has made it easier to compare ourselves with other inflation forecasters and also to assess our monetary policy. 2 the new interest rate assumption we now apply means that we can no longer use our old policy rule. if the forecast with a constant repo rate was close to two per cent, the repo rate would be held unchanged according to the old policy rule. if the forecast according to the new outlook shows inflation close to two per cent, the repo rate will normally develop in the way reflected by market expectations. this could mean that the repo rate, given the underlying inflation forecast, should be raised or lowered in a number of stages over the coming two - year period. the new outlook thus means that the monetary policy discussion is based on an interest rate path throughout the entire forecast period, while the old policy rule only took into account what should be done at the time the decision was made. i have seen several examples where the old policy rule is used in discussions concerning the new interest rate path. this is fatal, as it can lead to entirely wrong expectations of monetary policy. the old policy rule is dead and the market now needs to bury it. even with the new outlook we care about developments in the real economy when making monetary policy decision. if, for instance, the forecast inflation rate were to be close to target two years ahead, but showed a rapid acceleration at the same time as growth in the real economy was high, it is possible that the implied forward rate path could not be expected to reflect a desirable development in the repo rate. in this type of situation it is possible that the repo rate would need to be raised more quickly at the beginning of the forecast period. when we make our decisions regarding the repo rate, we thus do not merely look to see whether inflation is close to target two years ahead, we take into account the entire development paths for inflation and the real economy. a desirable monetary policy is characterised by inflation under normal circumstances being close to the inflation target in a twoyear time perspective while at the same time the paths for inflation and the real economy do not exhibit excessively large fluctuations. for the record, i would like to point out here that the forecast assumption that the repo rate will follow implied forward rates does not of course entail any commitment from the riksbank that this will be the case. we have no unique information about the future. we cannot in advance commit monetary policy to a particular sequence of future interest rate

the continued strong domestic productivity growth and international price pressures. with regard to household indebtedness and house prices, we expect that the growth rates will slow down, but we have not yet seen any certain signs of this. the picture painted earlier in the year still remains largely unchanged. our assessment throughout the year has been that the outlook for inflation and the economy over the coming years indicates that it is reasonable to assume the repo rate will need to be gradually increased. in accordance with this view, we have raised the repo rate four times so far this year and my assessment is that the repo rate will need to be raised further in future. however, as i mentioned earlier, we both can and should change our assessment if the economy develops in a manner we had not expected. thank you!