, if we disregard the temporary rise that will occur over the next few months as a result of the rise in oil prices. moreover, the turmoil affecting the international financial markets and the uncertainty with respect to the extent of possible fall - out on the rest of the economy all call for prudence. the risk of a rise in inflation has not been dispelled ; of that there can be no doubt, given the rise in oil prices, the weakness of the swiss franc against the euro, and the high level of capacity utilisation. nevertheless, we do not consider this to be a matter of urgency and view an adjustment in our policy as unnecessary under the current circumstances. it is evident that we will continue to keep a very close watch on developments in the situation. inflation forecast graph i will now turn to the final part of my remarks. what is our inflation forecast? the dashed red curve on the graph represents the new forecast. it relates to the period between the fourth quarter of 2007 and the third quarter of 2010, and maps the future development of inflation on the assumption that the 2. 75 % level remains constant over the forecasting period. for purposes of comparison, the dash - dotted green curve shows the inflation forecast of the september monetary assessment, which was also based on a three - month libor of 2. 75 %. the new forecast indicates that inflation will rise in the first half of 2008. it is likely that it will breach even the 2 % level. however, this increase will be temporary and will be chiefly due to the rise in oil prices. after that time, inflation will settle at around 1. 5 %, with a slight upward trend at the end of the period. the slowdown in the international economy explains the downward revision in the inflation outlook for 2009 and 2010. naturally, any forecast is uncertain, and at present both upside and downside risks are greater than usual. consequently, we will continue to keep a close watch on developments in the financial markets, the international economy, oil prices and the swiss franc exchange rate, in order to assess their impact on the inflation outlook and to be in a position to react swiftly should the need arise. observed inflation december 2007 q1 inflation q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 0. 06 0. 87 0. 91 1. 38 1. 35 1. 06 1. 18 1. 10 1

, 000. banks were allowed to issue up to 15 % of their primary dwelling home ( pdh ) loans above these ltv limits on an annual basis. we apply a more stringent limit to the purchase of houses for investment purposes and here the limit is 70 % ltv, with up to 10 % of new lending on this basis allowed above the limit. * * * at the time of introduction of the measures, we committed to regular reviews of their impact and effectiveness. this we believe represents good practice, and mitigates against any potential inaction bias. it is also consistent with the commitment for quarterly reviews of counter - cyclical capital buffer ( ccyb ) settings and annual reviews of the identification of, and buffer setting for, other systemically important institutions ( o - siis ) as prescribed in crr / crd iv. the review process was overseen by a new macroprudential measures committee and involved a range of analytical projects looking at issues such as borrower impact, the early performance of the measures against the stated objectives, and any side effects, including in relation to impact on the rental market, or leakages. to enhance transparency and understanding, research outputs on all these issues and records of the meetings are published on the central bank ’ s website. 7 in addition, feedback from external stakeholders was gathered through a call for evidence on the impact of the measures. submissions were received from a variety of property and construction industry stakeholders, financial services firms and groups, political parties, government departments, academics and individual members of the public. the submissions were a very useful input for our review, and were also published on the central bank of ireland ’ s website. it is obviously the case that it was very early after their initial introduction to be able to find much causal impact from the introduction of the measures, but still our review threw up some interesting findings and resulted in some changes to the design of our policies. we saw a reduction in high ltv mortgages and simulations from loan - loss forecasting models indicate that resilience of banks and households increased. we found that the introduction of the measures had an immediate and material impact in moderating price expectations. actual price increases also moderated although it is more difficult to ascribe any causality to our measures. in general, we found that the overall framework of the measures is appropriate and effective in meeting the objectives. nonetheless, following our 2016 review some changes to these parameters were applied to improve the sustainability and effectiveness