Critics point in particular to the differentiated collateral framework adopted by some national central banks to allow banks to participate in the three-year LTROs. Let me underscore that high haircuts are applied to the additional credit claims so as to ensure risk equivalence between this collateral and the regular framework.
Our central forecast – which is based on an assumption of further interest rate increases – is that underlying inflation will decline to the top of the target band in 2024. If interest rates were to remain unchanged, inflation would be higher than this. Over recent years, the Board has placed considerable emphasis on trends in growth in labour costs when making its decisions.