. the return of the core inflation rate to its low level before the vat rise, once the base effects are stripped out in the second half of next year, would be a good indicator that cost - and price - setting processes are moving in the right direction and are capable of surviving comfortably within an area of price stability. the absence of indexation clauses in wage bargaining for 2011, as stipulated in the agreement in force, will help prevent the rise in vat from exerting second - round and inflation - inertia effects. this experience is another example of the advantages to be had from abandoning indexation clauses, which are no more than a legacy of inflationary habits from a past firmly behind us, but whose continuing use has been a source of problems, as the banco de espana has reiterated. improving our economy ’ s productivity in the medium and long run will require seeing through other, deeper structural reforms, including most notably sectoral liberalisation, the rationalisation of the public sector ’ s role in economic activity and improvements to the education system. these are reforms whose introduction needs time and whose effects will be deployed over a lengthy period ; but the resolve to adopt them also has positive effects in the short run by improving expectations about our economy ’ s economic growth, which is particularly welcome in these testing times. thank you.

factor limiting their activity, with this figure following a rising trend in recent quarters. these problems are fairly broad - based across sectors of activity, but are somewhat more pronounced in sectors such as hospitality and construction, where more than 50 % of firms say they have been adversely affected. these difficulties appear to be influencing companies ’ hiring decisions, with 40 % of the affected firms reporting a reduction in hiring intentions. in turn, a similar percentage of companies said that these challenges were leading to higher wage pressures, while a lower proportion also reported an adverse impact on investment decisions, with smaller firms particularly affected. although the information available makes it difficult to conduct an in - depth analysis of why firms are struggling to find labour, the data from the ebae suggest a mismatch between the skills needed by firms and those offered by the workforce, with more than half of the affected companies reporting a shortage of suitably qualified workers for their job vacancies. the differences in the skills composition of the employed and the unemployed also point in this direction. while more than 50 % of unemployed individuals have a low level of education, 18 that figure is less than 30 % among the employed. this problem is somewhat more marked in jobs requiring intermediate or higher vocational training and, by sector of activity, in industry, construction and transportation. the second reason most frequently cited by firms is difficulty in retaining empl oyees, a problem that tends to be more acute in relation to low - skilled workers. 19 lo wer seco ndary educatio n o r less. difficulty retaining employees is also relatively co mmon in relation to workers with high levels o f educational attainment, altho ugh in this case firms mo re frequently repo rt difficulties o ffering a co mpetitive salary. alejandro fernandez cerezo and mario izquierdo ( 2023 ). other indicators based on employment inflows and outflows also suggest greater labour market tightness. for instance, job separation rates have fallen sharply ; this despite an increase in voluntary terminations, a phenomenon that has been far more marked in other countries, such as the united states, giving rise to term “ the great resignation ". 20 the fall in employment outflows is therefore associated with the decrease in labour shedding, which could reflect different factors, such as the greater readiness of firms to retain their employees given the difficulties in attracting new hires or the impact of the legal reforms approved in 2021.