Nevertheless, the recovery is likely to remain uneven over time and across economies and sectors, in an environment of continued uncertainty and with tensions in some segments of the financial markets. The annual rate of inflation in the euro area stood at 1.6% in May, up slightly from 1.5% in April, mostly because of higher energy prices.
We may see some further slight increases in inflation in the second half of this year. Looking further ahead, we continue to expect price developments to remain moderate over the policy relevant medium-term horizon. Our monetary analysis confirms that inflationary pressures over the medium term should be well contained. This is reflected in particular in the overall weak growth of money and credit.