Against this backdrop, we have the dynamics of inflation expectations: how they have been increased by the Bank’s policy and how the aforementioned three exogenous factors have hindered a rise in inflation expectations. This is the first issue to be analyzed in the comprehensive assessment.
The Governing Council will, in early March, take decisions on the continued implementation of the gradual phasing-out of the extraordinary liquidity measures that are not needed to the same extent as in the past. In order to counter effectively any threat to price stability over the medium to longer term, the liquidity provided will be absorbed when necessary.