Domestic cost pressures, notably from labour markets, are still subdued. The strong worldwide reflationary phase that seemed likely at the beginning of the year has not materialised. Overall, price pressures are still muted and the path of inflation remains conditional on continued support from monetary policy.
Finally, there were concerns that the ECB monetary policy could pose risks to financial stability and provoke excessive asset price increases. Clearly, this did not materialise as there are no generalised asset overvaluations in the euro area. In various countries, some restricted regional pockets of real estate price buoyancy are being dealt with targeted macroprudential measures.