While annual HICP inflation was slightly negative in October, it is expected to turn positive again in the coming months, and to remain at moderately positive rates over the policy-relevant horizon. At the same time, the latest information continues to signal an improvement in economic activity in the second half of this year.
Although this outlook remains subject to a high degree of uncertainty, we expect the euro area economy to recover at a gradual pace in 2010. The monetary analysis confirms the assessment of low inflationary pressure over the medium term, as money and credit growth has continued to slow down.