The recovery thus seems to be holding, but it should be acknowledged that expectations for economic growth in the area continue to be very moderate in the short and medium term. The ECB continues with an expansionary policy stance. We have reached an all-time low in the interest rates on the main refinancing operations, now at 0.25%; since July, a forward guidance policy has been pursued, conveying to economic agents the ECB’s decision to keep interest rates low for a prolonged period and to maintain generous liquidity provision. Maintaining and stepping up this expansionary monetary policy has naturally had to do with the recent course of inflation, proxied by the consumer price index, which stood in October at 0.7% for the euro area as a whole, a rate substantially off the target of 2%. Against this background, the first signs of the start of a recovery in the Spanish economy have begun to emerge. As you know, in the third quarter of this year Spain posted its first positive quarter-on-quarter rate of change in GDP since mid-2011. In the past two quarters, consumer spending has shown signs of stabilising, and even of picking up slightly. This positive trend should continue over the coming year, although the need for households to carry on reducing their debt will probably check the expansionary behaviour of this demand component.
Luis M Linde: Recent economic developments in the euro area and in Spain, and important financial system projects Address by Mr Luis M Linde, Governor of the Bank of Spain, at the Annual Conference 2013 of the Asociación de Mercados Financieros, Madrid, 25 November 2013. *  *  *  Let me first thank the Asociación de Mercados Financieros, and its Chairman, my good friend Enrique Prados, for kindly inviting me to accompany you today in this Annual Conference. The Association – which draws together a large number of financial market professionals – performs important work in channeling initiatives aimed at contributing to the better working of those markets. Their active collaboration with regulators in devising rules, their participation in public consultations and their educational role are all to be welcomed. My address today will be brief, so as not to outstay my welcome and encroach on your first course. It shall focus on three projects of particular importance for our financial system in the area of market infrastructures. But allow me first to comment on recent economic developments in the euro area and in Spain, developments that point, as we know, to a turn for the better. To the euro area first. After six consecutive quarters of contraction, second-quarter GDP in the area this year posted positive growth of 0.3% in quarter-on-quarter terms; in the third quarter it has held at a positive rate, albeit one of only 0.1%.