Incoming information since the last monetary policy meeting in early June signals a resumption of euro area economic activity, although the level of activity remains well below the levels prevailing before the coronavirus (COVID-19) pandemic and the outlook remains highly uncertain. Headline inflation is being dampened by lower energy prices and price pressures are expected to remain very subdued on account of the sharp decline in real GDP growth and the associated significant increase in economic slack. The ECB's monetary policy measures are gradually making their way through to the euro area economy, providing crucial support to the recovery and helping to offset the pandemic-related downward shift in the projected path of inflation. At the same time, the outlook is surrounded by high uncertainty and subject to downside risks. Against this background, the Governing Council decided to leave the overall monetary policy stance unchanged and to reconfirm the full set of its existing monetary policy measures.
