While it has taken time, slowly the euro area economy is returning towards its trend growth rate. Inflation developments Having spoken about activity developments, I will now turn to talk about inflation developments and prospects, before moving on to talk about monetary policy.
The headline rate of inflation (HICP) in the euro area has remained just above 2 per cent in recent years, mainly as a result of the strong increases in energy prices and, to a lesser extent, rises in administered prices and taxes.