On the basis of current and futures prices for oil and taking into account the temporary reduction in the German VAT rate, headline inflation is likely to remain negative over the coming months before turning positive again in early 2021. Over the medium term, a recovery in demand, supported by accommodative monetary and fiscal policies, will put upward pressure on inflation.
Monetary policy Since our last IMFC meeting in April, the ECB’s Governing Council has taken further decisive monetary policy measures to support the economy during its gradual reopening and to safeguard medium-term price stability.