I will also address the two topics selected by this Committee for todays hearing, namely the global monetary policy cycle and inflation differentials.
- I will also address the two topics selected by this Committee for todays hearing, namely the global monetary policy cycle and inflation differentials.
- The shock hit just as we were coming out of the pandemic and has continued to cause economic disruptions.
Given our proximity to the conflict and our dependence on energy imports, Europe has been hit particularly hard.
- Higher energy costs have been a key driver of euro area inflation, which in October reached double digits for the first time since the start of the monetary union.
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This rise in inflation affects everyone, but some are feeling it more than others.
- We are monitoring these divergences carefully and expect them to normalise as the impact of these shocks fades over time.
- The different shocks over the past year have also had an impact on real economic activity.
The European response to the war has garnered broad support among citizens and optimism about the future of the EU has increased.
- While monetary policy is geared towards bringing inflation back to our medium-term target, the economic outlook will also depend on the actions taken by other stakeholders.
- I encourage EU policymakers, including this Parliament, to soon reach a viable and broadly shared agreement to help strengthen the foundations of our Economic and Monetary Union.
- E. and Koester, G. (2022), The role of demand and supply in underlying inflation decomposing HICPX inflation into components,
Economic Bulletin, Issue 7, European Central Bank.
- See European Parliament Spring 2022 Survey: Rallying around the European flag - Democracy as anchor point in times of crisis.