The Governing Council is taking these concerns seriously. At the same time, euro area households seem to look with much less scepticism into the future. Their inflation expectations have remained more stable since the start of the year, and today remain close to a six-year high.
There is also tentative evidence suggesting that household inflation expectations are better predictors of future inflation outcomes and that euro area consumers have become less likely to expect inflation outcomes that would be inconsistent with the ECB’s definition of price stability.