Reflecting this, as the year progressed, upside risks to the maintenance of medium-term price stability were viewed to be gradually increasing. This assessment was reinforced by the evidence of the monetary analysis, which pointed to strong monetary growth, ample liquidity and rapid expansion of credit – especially consumer credit, notably for housing.
By the end of 2005, the evidence from both the economic and monetary perspectives was that an adjustment of the very accommodative stance of the ECB’s monetary policy was warranted. Therefore, on 1 December last, the Governing Council decided to increase interest by 25 basis points.