The economic situation in the euro area and the ECB’s monetary policy

Abstract

The war in Ukraine is severely affecting the euro area and has notably increased uncertainty. The impact of the war on the economy will depend on how the conflict evolves, on the effect of current sanctions and on possible further measures. Inflation has increased significantly and will remain high over the coming months, mainly because of the sharp rise in energy costs. Looking ahead, the calibration of our monetary policy will depend on the incoming data and our assessment of the macroeconomic outlook. In the current conditions of high uncertainty, we will maintain optionality, gradualism and flexibility in the conduct of monetary policy. We stand ready to take whatever action is needed to fulfil our mandate to maintain price stability and to contribute to safeguarding financial stability.