But prolonged pervasive uncertainty stemming from the escalating trade war and related to vulnerabilities in the emerging market economies, as well as ongoing geopolitical tensions, have left their mark on the economic sentiment. Europe’s labour markets have been resilient, so far, and that is supporting domestic demand.
However, the falling external demand is taking its toll, and having its effect also on the labour market. The Bank of Finland and other central banks in the Eurosystem are ready to do what is needed to reach our price stability target and support sustained growth and job creation. But monetary policy cannot be the only active player in the field.