I don’t think we’re already living in a “new normal”. The discussion on this should continue but caution is called for. There are certainly factors which have a lasting impact on prices – ageing populations, new technologies, globalisation. But many of the factors that keep inflation below target are also temporary.
I am convinced, as is the Governing Council, that we are definitely able to reach our objective of below, but close to, 2%. We are already seeing a build-up of reflationary forces. In the future we can certainly have a debate about our objective – as we did in the early 2000s.