“ a time to act. the outlook for monetary policy in the euro area. ” speech by klaas knot at the danske bank copenhagen, 30 august 2022 there is no time for tinkering. we must forcefully tackle the still growing problem of persistently high inflation, within the core of our mandate. let me recap the reasons behind this urgency. euro area headline inflation reached 8. 9 % yoy in july, the highest figure since the creation of the euro ( see figure 1 below ). 10. 5 8. 5 figure 1. hicp euro area ( percentage points contribution to hicp ) 6. 5 4. 5 2. 5 0. 5 - 1. 5 jan - 19 food jan - 20 neig jan - 21 energy services jan - 22 hicp core inflation in explaining high inflation, much attention has focused on energy and food price inflation, which have provided the largest contribution to headline inflation, and which are driven by negative supply shocks related to supply chain constraints and russia ’ s war in ukraine. but this is not the full story. positive demand shocks – related to the strong pick - up in demand following the relaxation of covid - 19 restrictions – have also been at play. to me, two main types of evidence point to an important role that demand shocks have played so far. first, for some time now, inflationary pressures have been increasingly broad - based. the contributions to headline inflation of non - energy industrial goods - and services inflation have steadily increased in recent months ( see figure 1 ). note that services, which are not directly affected by higher commodity prices and disrupted production chains, account for 42 % of the euro area hicp. moreover, measures of underlying inflation that we monitor closely to see through temporary shocks have been increasing further, and currently stand at or near their historical maximum ( see figures 2 and 3 ). most notably, core inflation is on the rise and reached 4 % in july. as a number of temporary measures introduced to fight high inflation, such as the german nine - euro public transport ticket, are set to expire, it is unrealistic to assume that core inflation has peaked. 10. 0 figure 2. measures of underlying inflation ( annual percentage changes ) 5. 0 0. 0 - 5. 0 hicp hicp excl energy and food hicp excl energy, food, travel - related services, clothing and footwear supercore figure 3. measures of underlying inflation ( annual percentage changes,

it took quite some time for dnb to evolve into the kind of national bank the king had in mind : a bank granting credit and distributing banknotes throughout the country. it wasn ’ t until the end of the 19th century that dnb turned from a principal lender to trade and industry into a real lender of last resort. by protecting the netherlands from several financial crises, dnb gradually became – in the words of my then predecessor vissering – “ the absolute central institution, around which everything was concentrated ”. in those unsettled times, dnb evolved from “ a sleeping old lady ” into a vibrant institution with a wide range of activities, and increasingly interwoven with society. we gained prominence as a national monetary institution. and the foundations where laid for the modern, post - war dutch central bank. dnb was nationalised. and the 1948 bank act made dnb responsible for preserving the value of the currency. bis central bankers ’ speeches from then onwards, dnb was known as the “ guardian of the guilder. we were responsible for circulating banknotes and for managing the payment system. and finally, dnb was given the task of supervising all financial institutions. around the beginning of this millennium, financial supervision was reorganized along functional lines. i can be a lot briefer about dnb ’ s remaining history, given that many of you have shared our various milestones in recent years. by this, of course, i mean the treaty of maastricht, which established the economic and monetary union, and the introduction of the single currency. these major events paved the way for dnb, and 17 other central banks, to become a truly pan - european institution within the european system of central banks. and the most recent milestone, of course, is the european council ’ s decision in 2012 to create a european banking union ; a project which is still under construction. in the first few decades after european co - operation got underway, we were able to reach some kind of consensus on the role of central banks. and their relationship with society. this general view was threefold : one : central banks served society best if they focused primarily on price stability. two : central banks played a relatively narrow role in financial stability. yes, they should be ready to provide emergency liquidity, while promoting the stability of the payment system, but that is where it stopped. three : central banks should leave micro - prudential supervision and regulation to other, independent parties.