relates to possible second - round effects, i. e. when high inflation passes through to wage increases and these, in turn, push up consumer prices to the extent that firms seek to maintain ( or widen ) their margins. again, this would make inflation far more persistent and increase the likelihood of the feared de - anchoring of inflation expectations. as i said, while there is no evidence of such effects occurring at present, at least on a widespread basis, the current high inflation does make this more likely. naturally, the extent of the economic downturn – over which, as i indicated earlier, there is significant uncertainty –, and its effects on wages and profit margins, will be a key determinant of the medium - term inflation outlook and, therefore, of our monetary policy decisions. ultimately, our next decisions will be based on the incoming data and their implications for achieving our medium - term inflation target, in line with the “ meeting - to - meeting ” approach that we have adopted. in any event, interest rates will have to reach a level that allows us to ensure a gradual convergence of inflation to our medium - term target, and how quickly we reach that level will be conditioned by the same target. whether this means reaching interest rates at levels close to neutral or higher will therefore depend on that target. the normalisation of monetary policy is prompting a tightening of financial conditions. the process of monetary policy normalisation has translated into a significant increase in market interest rates. since early 2022 the 12 - month euribor has climbed by more than 290 bp, while the 10 - year overnight index swap ( ois ) rate ( typically used as the risk - free benchmark interest rate ) has risen by 240 bp. these increases have begun to pass through to the cost of bank financing for firms and households, which will help to contain inflationary pressures. in spain, long - term government bond yields have risen by 2. 5 pp this year, and the risk premium relative to the german benchmark has increased by 35 bp, although it has remained stable since the tpi was approved. meanwhile, the average cost of long - term corporate debt issuance has also risen sharply ( over 220 bp ) and, as with public debt, has reached levels not seen since 2014. moreover, the ibex 35 has fallen by nearly 11 % since early 2022. the impact on bank lending conditions has been more subdued. the average cost of new loans rose up to july ( latest available figure

cannot solely be based on quantitative evidence or purely technical criteria. clear limits exist, imposed by the issues ’ complex nature, the availability of information and the capacity of social sciences to analyse and make reliable and unambiguous projections within the timeframes in which society requires suitable answers for the challenges it faces. and one of economists ’ core tasks should indeed be to highlight those limits, so that the findings of the assessments and analyses are appropriately interpreted with the due caveats. but to acknowledge and highlight these limits ( especially on the ability to assess ex ante, i. e. to foresee in real time the different outcomes that may ensue from different courses of action in the many key areas when faced with complex problems ) should not check our ambition for these assessments to influence the decision - making process. while not definitive, their conclusions act as an objective reference which is relevant to achieving the intended aims of public policies. ex post assessments of policies are admittedly much further along in their development at the practical level, and their benefits as a part of the overall public policy process are wellestablished in the most advanced democratic societies. yet they also come up against theoretical and empirical limitations that we cannot conceal. on this front, spain is lagging behind our peers. and this is not because of a lack of know - how but rather, in my opinion, on account of the existing limitations in the current administrative, political and social ecosystem which do not sufficiently encourage the insertion of the assessment process into the public - policy - programme design and review cycle. true, there have been some promising developments of late, such as the mandatory periodic evaluations to assess the functioning of the minimum income scheme. yet in much of the spanish administrative apparatus there are still significant technical hurdles to building potential ex ante or, at least, ex post assessments into the design of public programmes. these impediments not only limit the general government ’ s own ability to conduct thorough assessments, but also prevent the findings of external assessments from being fully harnessed. political action to address them is also an important long - term policy ; for example, the creation of technical posts and hiring mechanisms that attract people with adequate training. setting up agencies without long - term hiring plans does not work. nor is it just a question of public - sector shortcomings. in the private sector or in civil society, institutions and fora engaging in thorough assessment of public policies in spain are also thin on the ground compared with our european