one hand, the earlier - than - expected easing in energy prices has led to a decrease in headline inflation since october 2022, from 10. 6 % to 6. 9 % in march2 – though this level is obviously still far too high. we also expect tensions on food prices, which have soared since 2022, to start fading from the third quarter of 2023, in the wake of the recent sharp decrease on international markets. these two items, energy and food, are traditionally the most volatile items in headline inflation. together they constitute about 30 % of the average consumption basket, but they have by far the strongest impact on the perception of price increases : this is what consumers buy the most frequently. 1 / 3 bis - central bankers'speeches on the other hand, we now face the risk of entrenched inflation, which lies in the underlying or'core'component. it actually encompasses roughly 70 % of the average consumption basket : manufactured goods, and services, which weigh roughly twice as much as manufactured goods. core inflation has risen steadily while less fast over the past months, to reach 5. 7 % in march. in other words, inflation has become more widespread, and potentially more persistent. but monetary policy is most effective on core inflation, and it is our duty to bring it back under control. our monetary policy response to rising inflation has been strong and swift. our past rate increases ( + 350 basis points since last july ) are in the process of passing through to the real economy, and we expect their effect to amplify in coming months. we at the ecb are now moving from a " sprint " to a " long - distance race " : at our next meetings, we will make decisions on potential new rate hikes by looking at three key economic indicators : inflation outlook, underlying inflation and monetary policy transmission. rest assured that the ecb governing council is fully committed to rein in inflation, and to ensure that it returns towards 2 % by end 2024 or end 2025. ii. paris'momentum as financial centre amidst this geopolitical and economic uncertainty, and despite the recent turmoil in the united states and in switzerland, financial stability has been preserved in europe. eu banks are robust, with substantial capital and liquidity buffers : they are in their overwhelming majority subject to stringent basel requirements – which makes a big difference with the many mid - sized us banks. we have in the euro area no " sorgenkind " or " problem child

set window. asic and the rba have made it clear that they expect all bank bill market participants – including the banks that issue the bank bills, as well as the participants that buy them – to adhere to the guidelines and support the new bbsw methodology. this has helped to address the concerns that some market participants had about trading during the rate set. turning to the second key step to help ensure that bbsw remains a robust benchmark, the australian government has recently introduced a new regulatory framework for financial benchmarks. 3 the legislation empowers asic to set the rules for and license administrators of significant benchmarks such as bbsw. asic will also have the power to compel submissions to a significant benchmark in the rare circumstances where the benchmark would otherwise cease to be published. finally, the legislation makes it an offence to manipulate financial benchmarks. this new regulatory framework has helped to address the uncertainty that institutions were facing when participating in the bbsw rate setting process. it should also support the continued use of bbsw in the european union ( eu ), where new regulations require benchmarks used in the eu to be subject to a robust regulatory framework. finding the balance between credit - based and risk - free benchmarks while we expect that bbsw will remain a robust benchmark, it is important for market participants to ask whether bbsw is the most appropriate benchmark for their financial contracts. this is particularly worth considering in the light of the transition that is taking place away from libor towards risk - free rates. for some financial products, it can make sense to reference a risk - free rate instead of a creditbased benchmark. for instance, floating rate notes ( frns ) issued by governments, non - financial corporations and securitisation trusts, which are currently priced at a spread to bbsw, could instead tie their coupon payments to the cash rate. as the rba's operational target for monetary policy and the reference rate for ois and other financial contracts, the cash rate is the risk - free interest rate benchmark for the australian dollar. the rba measures the cash rate directly from transactions in the interbank overnight cash market, and we have ensured that our methodology is in line with the iosco benchmark principles. 4 however, consistent with the challenges faced by users of libor looking to transition to alternative risk - free rates, the cash rate is not a perfect substitute for bbsw, as it is an overnight rate rather