Recently, the Governing Council has become more confident about the firmness of the European recovery. As price pressures in the euro area increased, we modestly recalibrated the PEPP in September. So to complete the circle. On the first slide I showed you that the pandemic-induced inflation gap is closing.
Against this backdrop, a moderate rise in interest rates is consistent with our pledge to maintain favourable financing conditions going forward – that is, as long as higher interest rates are driven by higher growth and inflation expectations. And so, the ECB’s current baseline scenario is consistent with ending the PEPP in March 2022.