These were reasons why we raised interest rates by 25 basispoints in July this year. Looking ahead, in particular due to the direct and indirect effects of commodity price increases, the annual HICP inflation rate is likely to remain well above a level consistent with price stability for quite some time, moderating only gradually in 2009.
The ECB staff projects average annual HICP inflation between 3.4% and 3.6% in 2008 and between 2.3% and 2.9% in 2009. I would also like to stress that risks to price stability at the policy-relevant medium-term horizon continue to remain clearly on the upside. Monetary analysis As you know a particular feature of our analytical framework is the monetary analysis.