In 2003, the Governing Council confirmed this definition, while clarifying that it aimed for annual HICP inflation “below, but close to, 2%” over the medium term. The HICP was chosen as the index used to define price stability because it is a state-of-theart measure of the price of households’ monetary consumption expenditures in the euro area.
Although the evidence is as yet incomplete, this episode has been much less serious than those in the mid 1970s, the early 1980s and the early 1990s. It also has been very mild indeed in comparison with recent outcomes in many other countries, where deep recessions have been experienced.