as i have already said, we will assess whether these factors become steady against the backdrop of increased inflation expectations. moreover, the influence of demand on prices will also depend on future changes in the epidemiological situation, the pace of recovery processes when vaccines become widely used, and an improvement of consumer sentiment and business expectations. as we could observe in summer and early autumn, when the situation returns to normal, the recovery may be sufficiently quick. at the moment, we consider it too early to adjust our medium - term inflation forecast since it is necessary to also analyse the effect of competing factors on price movements. as regards the near future, our preliminary estimates show that annual inflation will approximate 5 % in 2021 q1. further on, if the influence of one - off factors diminishes rather fast, it will trend down and return to 4 % by mid - 2021. given the accommodative monetary policy pursued, inflation is expected to equal 3. 5 – 4. 0 % by the end of 2021, subsequently stabilising close to 4 %. we will carry out an additional analysis to assess whether there are grounds for adjusting our forecast in february, for the core meeting on the key rate. as regards other risks for medium - term economic development and inflation, their estimate has remained unchanged overall. various geopolitical risks are still relevant — they may provoke fluctuations in financial markets, affect exchange rate expectations and sentiments, and influence trends in the russian and global economies. as always, further changes in budget spending are a critical factor. this has a considerable influence on our monetary policy decisions. there is still uncertainty about the estimate of the pandemic impact on the russian economy ’ s potential, especially amid the current worsening of the epidemiological situation. given such highly uneven trends in the economy and price movements, we will need to carry out an additional analysis of how the situation will be changing and whether we still have some room for cutting the key rate when making our key rate decisions in the future. it is hard to affirm this now. if the impact of one - off factors wanes quickly and inflation expectations reverse, it is entirely possible that there may be grounds for a further reduction in the key rate, yet this will not necessarily be the case. i would also like to emphasise that it is now crucial to maintain the robustness of the monetary policy to various scenarios. our policy is aimed at keeping inflation close to 4 % under any scenario of

an increase in prices for a broader range of goods and services. this in turn explains the readiness to pay more and pushes prices upwards. actually, we are already observing such an environment, which once again proves that households ’ inflation expectations are currently not anchored yet. when i say that they are not anchored, i do not imply the level of households ’ inflation expectations, but rather their response to one - off factors. the fact that households ’ inflation expectations are significantly higher than current inflation is typical not only of russia, but of a whole range of countries ( even where inflation is very low ). in terms of monetary policy, this is the sensitivity of inflation expectations to temporary or local factors which induces risks, rather than the fact that households ’ inflation expectations exceed inflation measures. this is clear from the analysis of the reasons causing inflation deviation away from our october ’ s forecast. this deviation is quite notable — + 0. 7 percentage points. according to preliminary estimates, 0. 2 percentage points of this deviation stem from a faster rise in sugar and sunflower 1 / 4 bis central bankers'speeches oil prices and 0. 3 percentage points — from the growth of grain export prices and their passthrough to prices for both bakery products and a broader range of food products. the remaining 0. 2 percentage points are interpreted as additional steady inflationary pressure. it may result from both a faster revival of demand in a number of industries already facing supply - side constraints and secondary effects brought about by increased inflation expectations. this is what may impact a steady level of inflationary pressure in the future as well. therefore, today it is rather important how the situation will be unfolding in the future, including how inflation expectations will be changing and whether secondary effects may become more intense. this may result in a longer - lasting influence of one - off factors on prices. moreover, we should take into account that a rise in inflation expectations may speed up the growth of the demand for consumer lending which has already been expanding materially amid the accommodative monetary policy. monetary conditions are the third factor we discussed when making our decision. monetary conditions remain accommodative. coupled with the government ’ s support measures, this promotes lending across all segments, including the households, corporates, and small and medium - sized businesses. the annual growth of corporate lending reached its five - year high in october. the offering of corporate bonds has also been expanding. mortgage lending continues to increase significantly. the portion of