More importantly, in an environment characterised by a prolonged period of low inflation and with additional downward pressures already in the pipeline − as signalled by the subdued dynamics of producer price inflation − the risks of a further decline in inflation expectations and of their de-anchoring from the definition of price stability remain non-negligible. 24.
At our last meeting in Malta we stressed that the strength and persistence of the factors that are currently slowing the return of inflation to levels below, but close to, 2 per cent in the medium term require attention and thorough analysis.