Chart 19: Credit standards on loans to euro area firms (left panel) and households for house purchase (right panel) and contributing factors (net percentages)  Source: ECB (BLS). Notes: Net percentages are defined as the difference between the sum of the percentages of banks responding “tightened considerably” and “tightened somewhat” and the sum of the percentages of banks responding “eased somewhat” and “eased considerably”.
Also, the existing easy monetary policy stance and positive terms of trade effects were expected to add to domestic inflation pressures. The persistence of the shock has resulted in CPI inflation running below the 2% target mid-point for a considerable period. Such a policy response to external supply shocks is consistent with our flexible inflation targeting framework.