If the current monetary policy is maintained, labor shortages will intensify further as the economy improves, and there will be a phase in which both wages and prices increase. If their momentum is strong enough, the Bank will start reducing the level of monetary easing.
For us to successfully maintain price stability, we constantly have to make all the reasons underlying our decisions transparent to the public. The announcement of the monetary policy strategy in October 1998, well before the introduction of the euro, was a key element in this. It clearly stated the ECB’s understanding of its objective and the framework used to guide policy decisions.