KOF Monetary Policy Communicator for the Euro Area
The KOF MPC figure for 8 June 2017 is -0.04. As communicated by the ECB, underlying inflation remains low and has yet to show convincing signs of a pick-up.
At today’s meeting the ECB Governing Council decided to keep all key ECB interest rates unchanged.
According to Eurostat’s flash estimate, euro area annual HICP inflation was to 1.4% in May, after 1.9% in April and 1.5% in March. Recent volatility in inflation was due to energy prices and temporary increases in services prices over the Easter period. Headline inflation is expected to remain around current levels in the coming months. But the ECB still sees no signs of a convincing upward trend in underlying inflation as
unutilised resources are still weighing on domestic price and wage formation. The outlook for inflation has been revised downwards, mainly based on lower oil prices. The Eurosystem staff macroeconomic projections foresee annual inflation at 1.5% in 2017, 1.3% in 2018 and 1.6% in 2019 (March projections for 2017-2019: 1.7%, 1.6% and 1.7%). Against this backdrop the ECB confirmed that a very substantial degree of
monetary accommodation is needed to secure a sustained return of inflation rates towards the ECB’s target.
Current ECB holdings of securities for monetary policy purposes amount to 2,015bn euros (end of April: 1,947bn euros).