BIS Review 44/2008  3  Definition of price stability The ECB defines its price stability objective as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below, but close to 2% over the medium term.
Interest rates on term instruments once declined from mid-July, but have recently increased again reflecting the change in expectations that the zero interest rate policy would be terminated. The Japan premium remains negligible. Yields on long-term government bonds recently increased somewhat, and has been around 1.75 percent.