However, it should be stressed that risks appear very limited given the continued anchoring of longer-term inflation expectations at levels consistent with price stability, wage and price stickiness and the still sustained pace of monetary dynamics. By contrast, upside tail-risks to inflation receive less attention – but may be more relevant and a stronger source of concern in the medium to longer term.
Various estimates of underlying broad money point to a sustained but moderating rate of monetary expansion in the euro area. Monetary trends therefore support the view that inflationary pressures are diminishing further, with some risks remaining on the upside in the medium to longer term.