While monetary policy cannot therefore react mechanically to every deviation from the reference value, deviations of monetary growth from the reference value need to be carefully analysed. Other upward risks to price stability in the euro area may be indicated by the fact that the annual rate of growth of credit granted to the private sector remains substantial, at around 10%.
The demand for credit is broadly based, originating from both households and corporations. The main factors behind this development appear to be the low levels of bank lending interest rates in conjunction with the ongoing strengthening of economic activity in the euro area.