Monetary Policy Report - May 2000
The global economy has shown greater strength than was anticipated at the time of the November Report. Growth in both the emerging-market and European economies has accelerated, and the pace of the economic expansion in the United States has increased even further. Japan, however, has not yet shared in this stepped-up activity.
This strengthening pace of global economic expansion carries with it an increasing risk of potential inflation pressures. This is especially true for the United States, where there is mounting evidence that demand is pressing against supply, particularly in the labour market. In addition, because of the marked rise in world oil prices during the winter, the headline rate of consumer inflation increased sharply in most countries.