Incoming information since the last Governing Council meeting in early September confirms the previous assessment of a protracted weakness in euro area growth dynamics, the persistence of prominent downside risks and muted inflation pressures.
The risks surrounding the euro area growth outlook remain on the downside. In particular, these risks pertain to the prolonged presence of uncertainties, related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets. At the same time, ongoing employment growth and increasing wages continue to underpin the resilience of the euro area economy. Against this overall background, the Governing Council at its October meeting kept its monetary policy stance unchanged, confirming the decisions taken at the previous meeting in September.
The comprehensive package of policy measures that was decided at the September meeting provides substantial monetary stimulus, and thus will contribute to a further easing in borrowing conditions for firms and households. This will support the euro area expansion, the ongoing build-up of domestic price pressures and, thus, the sustained convergence of inflation to the Governing Council’s medium-term inflation aim.
