composition effects in the wage statistics. if, for example, new groups are being employed at low entry wages to a greater extent than before, then the average rate of wage increase will be lower. but so far there have not been any signs that the rate of wage increase has accelerated. of course, this is something we are monitoring closely. inflation is still high, just as i said before. in april it was 3. 4 per cent according to the cpi. this was entirely in line with our assessment at the most recent monetary policy meeting. since april the oil price has risen substantially. spot and forward prices of oil are now around 30 per cent higher than they were in april. it is probable that the higher oil prices may affect inflation via higher petrol prices. in july we will once again weigh up these counteracting forces this was some of the new information received in recent weeks. further information will be presented over the coming weeks, and we will give consideration to this information as well at our next monetary policy meeting. at the most recent meeting in april the executive board ’ s view of the interest rate path was the same as in february. my view then was that there was a greater risk of international price impulses forcing up inflation through higher inflation expectations. this was a reason why i voted to hold the repo rate unchanged. at the same time, i also considered that the financial unease and the slowdown in international growth could mean a risk of weaker growth and inflation in the long term. the counteracting forces we had to consider in april are still in place. there are discussions of what will happen to monetary policy when the oil price has risen roughly in line with the alternative scenario outlined in our february report. this could indicate a higher interest rate path. but it is not that simple. the analysis made in that scenario only takes into account an alternative outcome for the oil price. the analysis made in a monetary policy decision takes into account everything that has happened in the economy. how all these aspects should be weighed together is something i and my colleagues on the executive board will have to consider when we meet for a new monetary policy meeting in the first week of july.

and increases in property prices could go too far, with the risk that demand might fall sharply if there is an adjustment further ahead. however, these risks are difficult to quantify and they may lie far in the future. in this way, they do not easily fit into our usual analysis and forecasting work. we executive board members have nevertheless considered in our discussions that we should in some way take these risks into account, and this has been one of the pieces of the puzzle that explains our recent actions. in practice, it is often difficult to estimate how lasting various structural changes and other economic developments will be. for example, both the riksbank and other forecasters have been uncertain as to whether the strong productivity in recent years has been temporary or a more lasting change. conducting monetary policy that has substantial stabilisation policy ambitions could thus risk reinforcing cyclical fluctuations rather than subduing them. the conditions for succeeding with an active monetary policy are also complicated in practice since it takes time before the full effects of interest rate adjustments are visible. one therefore should not expect monetary policy to be able to fine tune economic activity to any great extent. there are also other reasons that limit the ambition to stabilise the real economy. the flexible application of our monetary policy must not diminish confidence in the inflation target. for this reason, it is important that deviations from the target should not be allowed to become too prolonged. this is why the riksbank has chosen to aim under normal circumstances to bring inflation back on target within two years. one can say that this is a restriction we have placed on ourselves to create flexibility in an orderly manner. at the same time, it is not appropriate to set restrictions for monetary policy that would be binding regardless of developments in the economy. there may – exceptionally – be situations where the consequences of bringing inflation back on target within two years may lead to unacceptable fluctuations in economic activity. it has sometimes been claimed that there is currently a risk that inflation could remain subdued over a long period of time, partly as a result of globalisation, and that this may mean that inflation is below target for longer than two years. we have made another assessment, as i mentioned earlier, but this type of situation is an example of when it might be appropriate to deviate from our normal target horizon. if we were to make the assessment that this type of situation had arisen, we would make it quite clear in advance. we also make clear how long we