But with the wisdom of hindsight it is probable that we should have tightened policy earlier and more aggressively than we did; had we done so, we might have nipped inflationary pressures in the bud at an earlier stage, and it may have been possible to ease policy earlier than was in fact the case.
It is heavily dependent on how market developments and financial conditions evolve, and how banks, households and firms respond. The performance to date of the core financial system in the euro area, and here at home, has been encouraging. The euro area operational framework has worked well and, as I have stated, continues to respond flexibly to the evolving situation.