Second, underlying inflation remains close to the upper end of this inflation objective, which means that the 4 - 6 percent range remains both a desirable and feasible objective for 2003. Third, there remain concerns about the risks of further VAT-induced increases in inflationary expectations. Hence it is important for the Bank to promote expectations of a sustainable low inflation.
It is not simply a constraint on what the ECB can do. It is also a safeguard that reinforces our action and protects our capability to act in pursuit of our objective, when such action becomes necessary. It is a catalyst of credibility.