European Central Bank, (2014), Monthly Bulletin, February.
Based on its regular economic and monetary analyses, the Governing Council decided at its meeting on 6 February to keep the key ECB interest rates unchanged. Incoming information confirms that the moderate recovery of the euro area economy is proceeding in line with the Governing Council’s previous assessment. At the same time, underlying price pressures in the euro area remain weak and monetary and credit dynamics are subdued. Inflation expectations for the euro area over the medium to long term continue to be firmly anchored in line with the Governing Council’s aim of maintaining inflation rates below, but close to, 2%. As stated previously, the euro area economy is now experiencing a prolonged period of low inflation, which will be followed by a gradual upward movement towards inflation rates below, but close to, 2% later on. Regarding the medium-term outlook for prices and growth, further information and analysis will become available in early March. Recent evidence fully confirms the Governing Council’s decision to maintain an accommodative stance of monetary policy for as long as necessary, which will assist the gradual economic recovery in the euro area. The Governing Council firmly reiterates its forward guidance. It continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time. This expectation is based on an overall subdued outlook for inflation extending into the medium term, given the broad-based weakness of the economy and subdued monetary dynamics. With regard to recent money market volatility and its potential impact on the monetary policy stance, the Governing Council is monitoring developments closely and is ready to consider all available instruments. Overall, the Governing Council remains firmly determined to maintain the high degree of monetary accommodation and to take further decisive action if required.