rates move up. why has saving been so high? historically, increased debt and rising house prices have been accompanied by a higher consumption ratio. this pattern is to be expected in particular when the driving force comes from lower interest rates : rising house prices augment house - hold wealth and together with low interest rates this points to increased house - hold consumption. the consumption ratio has been low, however, ever since 2001 despite the increased lending and higher house prices. that households both borrow and save so much and do so simultaneously may seem paradoxical. the major share of the loans is probably 3 / 5 connected with house purchases in the second - hand market. the cash flows that are generated when borrowing rises without a corresponding aggregated counterpart in the financing of new housing can be used for either consumption or financial investment. at the aggregated level it accordingly looks as though in recent years loans have gone to saving. we have seen the same development in, for example, the uk. we have no simple explanation of what underlies this. one conceivable explanation is that the stockmarket fall in 2000 and the subsequent economic slowdown stimulated prudential saving on account of labour market uncertainty and also led to increased saving by those who were directly hit by the share price fall. population groups that are approaching retirement, for example, may have increased their saving in financial assets in order to restore their wealth after the stockmarket fall. moreover, many elderly people may have chosen to move to a cheaper dwelling and thereby converted some of their real wealth into a financial asset. at the same time, households unaffected by the stockmarket fall that are younger and unconcerned about their future income may have continued to demand expensive dwellings since the interest costs have been so low. as the available statistics are mainly at an aggregated level, however, it is difficult to find evidence of the behaviour behind what we have seen. but if this interpretation holds, it is reasonable that consumption picks up when labour market uncertainty diminishes and when wealth has been restored by a combination of saving and rising asset prices. the current situation for monetary policy with that i shall move on to say something about our main scenario for economic developments in the years ahead. the international picture the outlook in the rest of the world is mainly bright. as we see it, international growth will remain high this year. conditions are also favourable for a continuation of high growth in the next few years, although we do count on a somewhat more subdued rate than last

adjustment of the imbalances would 4 / 5 also be likely to raise the very long - term interest rates. if these changes were to occur quickly and unexpectedly, there would be a risk of decreased world market growth. the swedish economy signals of an economic slowdown last spring were also evident in sweden but in june we counted on the dip being temporary, with a subsequent renewal of growth. so far, the new statistics since then seem to confirm our assessment. the second - quarter national accounts show that growth strengthened about as much as we had expected. an acceleration seems to have begun in the growth of private consumption, accompanied by a continuation of the last year ’ s upswing in investment, with a spread from residential construction to the corporate sector in general. in other words, domestic demand seems to be on the way to taking over as the main driving force for the ongoing expansion. it also looks as though last month ’ s budget bill will stimulate consumption in both the private and the public sector, above all next year. so we judge that fiscal policy will be more expansionary than we assumed in june. today, moreover, there is the effect of a monetary policy that is more expansionary than at the time of our assessment in june. of course we foresee that this, too, will contribute to a somewhat stronger increase in domestic demand than was assumed in june. exports were weaker than expected in the first half - year but recent signals ( monthly export statistics and business survey data on export orders ) point to some increase. the favourable international trend is generating general conditions for good export growth. at present a weak krona is contributing to the stimulus. all this points to some acceleration of growth next year, followed by a good continuation in the following year. the labour market the situation in the labour market is still difficult to assess. due to technical changes in the labour force surveys, interpreting recent developments has been particularly hazardous. with this reservation, there are some signs that the labour market is beginning to improve. the national accounts indicate that hours worked started to rise in the second quarter this year. so it looks as though firms ’ possibilities of stepping up production without taking on more labour are becoming increasingly limited. the leading indicators for the labour market also point to an improvement. this includes fewer layoffs and more job vacancies. inflation prospects in june we envisaged that this year ’ s weaker growth would mean that resource utilisation falls, if anything, and then picks up slowly in the coming