As a result of this analysis, and having found it less necessary in the current setting than in the past to reinforce our accommodative monetary policy stance through net asset purchases, the ECB Governing Council decided that monthly net purchases under the Asset Purchase Programme (APP) would amount to € billion in April, € billion in May and € billion in June. This means reducing the monthly volumes for May and June compared with those agreed in December. We also agreed that the calibration of net purchases for the third quarter will depend on developments in, and our assessment of, the economic outlook. In parallel, given the current extraordinary uncertainty, we underlined the data-dependent nature of our decisions and increased flexibility and optionality in the use of instruments. First, we pointed out that we will adopt whatever measures are necessary to fulfil the ECB’s price stability mandate and to safeguard financial stability. This allows us to provide certainty to all economic agents about our commitment to these objectives during a particularly uncertain time. Second, we explicitly stated that, if in the coming months new data support the expectation that the medium-term inflation outlook will not weaken even after net asset purchases have stopped, we will end net asset purchases under the APP in Q3. However, should the medium-term inflation outlook change and should financing conditions be inconsistent with continued progress towards our 2% target, we stand ready to revise the net asset purchase plan in terms of both its amount and its duration.
On the workers’ side, they are undoubtedly losing purchasing power. Indeed, the collective bargaining agreements registered in Spain in January and February this year reveal that wage settlements have reacted moderately to the high inflation environment for the time being. Specifically, in February the wage increase agreed for 2022 rose to 2.3% (from the 1.5% wage settlement for 2021), a percentage clearly below the inflation rates observed in recent months and those expected for this year as a whole. When assessing these figures, it should be borne in mind that the collective bargaining system is highly inertial. The above figures basically reflect the outcome of multiyear collective bargaining agreements over the last two years in an inflationary environment that is very different from today’s. Specifically, the figures for 2022 only include 19 agreements signed this year with a negotiated wage increase of 2.6%, affecting less than 15,000 workers. Therefore, they cannot be considered to offer a true picture of the state of collective bargaining in the early stages of this year. As regards businesses, various pieces of information show that in recent months they have not been fully passing the recent increase in their costs (basically the cost of their energy inputs, but also of other inputs) through to the prices of their products. In this respect, whether as a result of competitive pressures or demand weakness, profit margins appear to have declined recently as a consequence of the current inflationary episode.