And, populations are ageing, as people live longer, leading to different preferences to save rather than consume. By definition, these structural factors are slow moving, meaning they will anchor the historically low interest rates for some time to come.
These developments raise important questions. Is the euro area economy hitting its capacity constraints? Or is there still economic slack that is holding headline inflation down? How will wage inflation pass through to price inflation? How to measure economic slack There are signs of a tight labour market.