In such circumstances, there would be some room for manoeuvre on interest rates. The Governing Council is always ready to change rates whenever it deems such a move to be appropriate and it does not necessarily have to wait until the current uncertainties dissipate.
A significant development over the past year has been the sizeable appreciation of the euro from what was a clearly undervalued level. This should help to dampen inflation and ultimately improve purchasing power. However, the scale of the appreciation, if it were to continue, would undoubtedly slow activity somewhat.