One key indicator is core inflation, which strips out the eight most volatile components of the consumer price index, along with the effects of changes in indirect taxes on the remaining components. We have found that this measure gives a good indication of the trend of future inflation.
According to the ECB’s euro area bank lending survey, banks have certainly decreased on average their lending rates and softened their credit standards in the wake of our monetary policy measures. The availability of loans to small and medium-sized enterprises has improved since October 2014.11 But a closer inspection of the drivers of changes in credit standards is informative.