3 Price developments and monetary policy The economic upturn contrasts with the monetary policy stance remaining exceptionally expansionary. Today, the stance of monetary policy is no less expansionary than it was at the peak of the crisis. This is suggested by indicators which, among other things, also take the effects of the Eurosystem’s asset purchases into account.
However, the very expansionary monetary policy stance should be seen against the backdrop of domestic price pressures remaining low. Overall euro area inflation hit 2.1% in July, but inflation is currently being driven up by higher energy prices, in particular. Domestic price pressures are still distinctly lower. However, they are likely to intensify as aggregate capacity utilisation increases.