food by 1. 0 %. a second cause can be attributed to the strong rebound of energy prices, in particular oil and natural gas, the latter having also a direct impact on wholesale electricity prices. it is of course very hard to forecast prices, but futures markets for natural gas are currently pricing a sharp decrease in the second quarter of 2022, once the current high demand related to stock replenishment and the winter season is over. a third cause is the global shift from the consumption of services to the consumption of goods as the global economy reopened while health restrictions or behavioural changes still affect the service sector. with low inventories, severe supply bottlenecks in some key sectors such as shipping or semi - conductors, and shortages, supply - chains are struggling to serve this demand. the resulting increase in the price of raw materials and industrial inputs has been transmitted to manufactured goods prices. our central view is that the third cause will fade out over the coming quarters, but the exact timing is uncertain. some prices, such as those of timber and ferrous metals, have already passed their peak and are falling sharply. but as tensions remain acute in shipping and semi - conductors, we cannot rule out that supply - side bottlenecks will push out the date at which inflation starts to come back to its trend. at the same time, we see few signs of general wage increases, in line with subdued services inflation. moderate wage increases in the euro area, in some sectors of the economy, would certainly be warranted to make jobs more attractive and reduce labour shortages. but there are few signs of a wage - price spiral at the current juncture. indicators of long - term inflation expectations of professionals, both market - based and survey - based, have picked up but remain below our 2 % target. according to the ecb staff's latest macroeconomic projections, euro area inflation would decrease to 1. 5 % in 2023. some may question the latter figure and call it too conservative. let me take a practical approach here. there might be some upside risks by a few decimal points on our 2023 forecasts, but what matters for monetary policy is the distance of realized inflation from our target of 2 %. from this point of view, it is clear that the risk remains that we fall short of our inflation target in 2023 rather than exceed it. this calls for a continued accommodative monetary 2 / 5 bis central bankers'speeches policy. but we are carefully

francois villeroy de galhau : monetary strategy and inflation in europe - what ’ s new? speech by mr francois villeroy de galhau, governor of the bank of france, at the suerf conference, new york city, 12 october 2021. * * * ladies and gentlemen, i am very happy to join you today for this discussion on " eu and us perspectives ". exactly one year after my previous intervention in this forum, i definitely see a change for the better in the economic climate in europe. europe is now the most vaccinated continent in the world. economic growth in the euro area has so far been stronger than expected and according to our latest forecasts, real gdp is expected to exceed its pre - covid level by the end of this year. if anything, we can perhaps say that uncertainty has shifted a little bit from the growth outlook to the inflation outlook, but i will come back to this point later. my speech today will address three interconnected issues : i. what are the key changes following the ecb strategy review? ii. where do we stand on inflation? iii. perspectives on the ecb's monetary policy up to and after the end of the covid crisis. i. the ecb ’ s monetary policy framework the unanimous adoption in july of the new monetary policy strategy was an important achievement for the eurosystem. let me pay tribute to christine lagarde, and sum up our review in three key messages : 1. the ecb has become a clearer and more credible inflation targeter after the clarification of its 2 % inflation target, which is now both symmetric and medium - term, as i advocated here one year ago. to anchor inflation expectations, it is important to have symmetry built into the strategy so that our 2 % inflation target is no longer perceived as a ceiling. our objective is also forward - looking to help guide inflation expectations, but it does not ignore the past either. in this context, our new forward guidance announced in july plays a crucial role as it should reinforce the ecb's credibility. by incorporating conditionality on both inflation forecasts and underlying inflation outcomes relative to our 2 % target, it allows us to maintain strong and persistent monetary policy action, going beyond transitory inflationary effects. this is particularly relevant at present. 2. the ecb is a pioneer among central banks in the fight against climate change. our action here is guided by two findings : first, we have acknowledged that