Next year, it should fall below that level, depending on commodity price and wage developments. This pattern is also reflected in the latest ECB projections of inflation ranging between 1.2% and 2.2% next year.
The risks to the medium-term outlook for inflation were broadly balanced in the eyes of the Governing Council in its last meeting, whereas before they were seen as being on the upside. Our monetary analysis indicates that the underlying pace of monetary expansion remains moderate.