This report focuses on the implications of the changed inflation environment for the ECB’s monetary policy strategy, including the lessons learned from both the low inflation and high inflation periods, and the transition from one to the other. The starting point of the report is the outcome of the Monetary Policy Strategy Review 2020-21.
This report offers a strategic view on the economic and inflation environment in the euro area as part of the monetary policy strategy assessment 2025. It reassesses the factors shaping the inflation and economic environment in light of the recent inflation experience, analyses changes in structural factors and examines the implications for the inflation environment the ECB is likely to face. It also draws conclusions regarding the enhancements that need to be made to the existing analytical toolkit and inflation forecasting.
Kev Gregory / ShutterstockNato leaders agreed to ramp up defence spending to 5% of their countries’ economic output by 2035 at a summit in The Hague, Netherlands, on June 25.
We analyze the international dimension of repo markets using novel euro area regulatory microdata. Our findings highlight the deep integration of funding markets across the Atlantic and the US dollar’s outsized role.
We provide novel evidence on the supply-side transmission of monetary policy through a floating-rate channel. After a rate hike, firms with floating-rate loans keep prices elevated to offset higher borrowing costs, thereby reducing the effectiveness of monetary policy. Using monthly data on product-level prices, industry-level inflation rates and the euro-area credit register from 2021 to 2023, we find that the short-run impact of monetary tightening on inflation is 50% smaller when firms rely on floating-rate loans.
We provide novel evidence on the supply-side transmission of monetary policy through a floating-rate channel. After a rate hike, firms with floating-rate loans keep prices elevated to offset higher borrowing costs, thereby reducing the effectiveness of monetary policy. Using monthly data on product-level prices, industry-level inflation rates and the euro-area credit register from 2021 to 2023, we find that the short-run impact of monetary tightening on inflation is 50% smaller when firms rely on floating-rate loans.
We analyze the international dimension of repo markets using novel euro area regulatory microdata. Our findings highlight the deep integration of funding markets across the Atlantic and the US dollar’s outsized role.
British health insurer denied legitimate claims made by patients over 5-year period
Prime Minister Kyriakos Mitsotakis has suffered another serious blow to his image and his government’s fading prestige following the ousting of several members of the cabinet in connection to the farm subsidy scandal, which is emerging as a much more serious threat to New Democracy than the conservatives had initially estimated.
The issue of Libya is a concern again for the Greek government and its diplomats.
