The pace at which this is done will depend on how the economy develops and what the inflation data looks like. By tightening monetary policy, the aim is to stabilise inflation at its 2% target over the medium term. [Slide 10.
Warding off stagflation: very low unemployment rate in euro area – businesses concerned about availability of labour] Stagflation refers to a situation in which there is high inflation, weak growth in the economy and elevated unemployment all at the same time.