The latest ECB staff projections for the euro area point to annual headline inflation of 1.7% in 2017, 1.6% in 2018 and 1.7% in 2019. The comprehensive monetary policy measures taken by the ECB since June 2014 have materially contributed to the economic upturn. Financing conditions and credit demand have improved.
Lending volumes continue to rise, bank lending rates for households and companies have fallen to historically low levels; and there has been a decrease in their cross-country heterogeneity. Also, compared to six months ago, market-based inflation expectations have noticeably strengthened.