All in all, it is essential that the recent price developments do not give rise to broad-based infl ationary pressures over the medium term. The Governing Council’s decision will contribute to keeping infl ation expectations in the euro area fi rmly anchored in line with the aim of maintaining infl ation rates below, but close to, 2% over the medium term. Such anchoring is a prerequisite for monetary policy to contribute to economic growth in the euro area. At the same time, interest rates across the entire maturity spectrum remain low. Thus, the monetary policy stance remains accommodative, lending support to economic activity and job creation. As expected, recent economic data indicate some deceleration in the pace of economic growth in the second quarter of 2011. While the underlying momentum of economic growth in the euro area continues to be positive, uncertainty remains elevated. The Governing Council will continue to monitor very closely all developments with respect to upside risks to price stability.
Download File: ECB Monthly Bulletin 07.2011.pdf
