2008. the fall in employment has been smaller than the decline in output might imply. productivity has fallen markedly. during the downturn, the number of hours worked has decreased somewhat more than the number employed. according to the bank ’ s regional network, reduced use of overtime hours, partial lay - offs and reduced working hours among part - timers have resulted in lower average working hours. moreover, increased sickness absence has made a contribution. output growth is expected to increase gradually through 2010, while growth in the number of hours worked shows a relatively small increase. as a result, employment will gradually become more consistent with the level of output, and productivity will rise further through 2010. compared with previous downturns, productivity growth remains weak. owing to a fall in labour force participation, labour force figures were lower at the end of 2009 than at the beginning of the year in spite of underlying growth in the working - age population. some people exit the labour force or choose not to enter the labour force when labour demand falls. unemployment continued to rise in the latter half of 2009, but at a far slower pace than earlier in the downturn. registered unemployment is projected to remain at about today ’ s level to the end of the year. the technical reporting committee on income settlements estimates annual wage growth at 4. 1 per cent in 2009. we expect wage growth to show a further decline in 2010. the uncertainty facing exposed industries is still considerable and wage growth among trading partners is low. a reserve of foreign labour and persons who have temporarily exited the labour force, and who may rapidly return, is probably pulling down wage growth. wage earners ’ share of income in the mainland economy is at a high level, after rising from 62 per cent in 2005 to 65 per cent in 2009. on the other hand, unemployment will probably level off at a lower level than in previous downturns, and in some sectors of the economy unemployment is still low. wage growth is expected to move up towards the end of the projection period. the operational target of monetary policy is low and stable inflation with annual consumer price inflation of close to 2. 5 per cent over time. over the past 10 years, inflation has on average been somewhat below, but close to 2. 5 per cent. from 2003 consumer price inflation was consistently somewhat lower than the target and monetary policy was then oriented towards bringing up inflation. in 2007 and 2008, inflation edged up and exceeded the target somewhat. the key policy rate was gradually raised to a

securities denominated in euros and in foreign currency ; this was partially offset by higher interest income on securities held for monetary policy purposes, driven by the exceptional increase in such holdings. realized gains rose by €0. 4 billion, owing mainly to the disposal of equity and investment fund shares in the course of rebalancing the bank ’ s investment portfolio. transfers to the provision for general risks amounted to €2. 5 billion, €1. 0 billion more than in 2019. the allocation is consistent with the objective of progressively strengthening the financial buffers against the significant growth in the size of the bank ’ s balance sheet and in its overall risk exposure, ascribable mainly to monetary policy assets. taxes, amounting to €1. 4 billion, increased compared with 2019, when they stood at just over €1 billion. operating expenses remained largely stable. excluding charitable donations, operating expense fell by a total of around 4 per cent owing to the decrease in staff costs, mainly due to the decline in severance payments during the year, and in costs associated with the physical presence of staff in the workplace such as, for example, business trips and utilities. in 2020, the bank ’ s staff, numbering 6, 671 at the close of the year, worked an average of almost 60 per cent of working days remotely ( compared with 4 per cent in 2019 ) ; the percentage rises to over 90 per cent when considering only the period between mid - march and the end of april. the bank ’ s it infrastructure and equipment and its organizational and flexible governance arrangements, and the staff ’ s dedication and ability to adapt to the new working conditions made it possible for the bank to respond quickly to the challenges posed by the pandemic. the bank was always able to ensure the delivery of essential services to the public, whilst maintaining its high level of quality. the public was encouraged to use online channels to access information services, such as data contained in the central credit register and the interbank register of bad cheques and payment cards. activities that require the physical presence of staff in the workplace, mainly banknote production and distribution as well as collection and payment services on behalf of the state, were adapted to ensure they can be carried out safely, thereby guaranteeing business continuity. the experience acquired over the course of the emergency has laid the groundwork for defining a new ‘ hybrid ’ model of work organization in which physical presence in the workplace must be integrated with remote working. we are hard at