Additional increases in administered prices and indirect taxes will also contribute to inflationary pressures. In particular, the expected VAT increase in Germany (+3 pp) next year is expected to keep euro area headline inflation at a higher level (+0.3 pp in 2007). Finally, monetary and credit aggregates are growing at rates much higher than is compatible with non-inflationary real growth.
So, oil price developments are just one, albeit important factor contributing to inflationary risks in the current environment.