However, these factors have to be off-set against the costs of high inflation which if left  untreated in a timely and effective manner, will have far greater macroeconomic consequences. That is why we at the ECB cannot allow ourselves to deviate from our primary objective, which is price stability. Credibility and communication Credibility is a key element of effective monetary policy.
Credibility and good communication go hand-in-hand. As I have outlined before, I believe transparency, honesty and engagement help to build credibility and to set expectations. Trusting the Central Bank’s commitment to price stability, and understanding exactly how it plans to go about achieving it, influences the public’s (and financial markets’) inflation expectations.