also broadly reflected in the december 2017 eurosystem staff macroeconomic projections for the euro area, which foresee annual hicp inflation at 1. 5 % in 2017, 1. 4 % in 2018, 1. 5 % in 2019 and 1. 7 % in 2020. compared with the september 2017 ecb staff macroeconomic projections, the outlook for headline hicp inflation has been revised up, mainly reflecting higher oil and food prices. turning to the monetary analysis, broad money ( m3 ) continues to expand at a robust pace, with an annual rate of growth of 5. 0 % in october 2017, from 5. 2 % in september, reflecting the impact of the ecb ’ s monetary policy measures and the low opportunity cost of holding the most liquid deposits. accordingly, the narrow monetary aggregate m1 continued to be the main contributor to broad money growth, expanding at an annual rate of 9. 4 % in october, after 9. 8 % in september. the recovery in the growth of loans to the private sector observed since the beginning of 2014 is proceeding. the annual growth rate of loans to non - financial corporations increased to 2. 9 % in october 2017, after 2. 4 % in september, while the annual growth rate of loans to households remained stable at 2. 7 %. the pass - through of the monetary policy measures put in place since june 2014 continues to significantly support borrowing conditions for firms and households, access to financing ‒ notably for small and medium - sized enterprises ‒ and credit flows across the euro area. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need for an ample degree of monetary accommodation to secure a sustained return of inflation rates towards levels that are below, but close to, 2 %. in order to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively to strengthening the longer - term growth potential and reducing vulnerabilities. the implementation of structural reforms in all euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. regarding fiscal policies, the increasingly solid and broad - based expansion strengthens the case for rebuilding fiscal buffers. this is particularly important in countries where government debt remains high. all countries would benefit from intensifying efforts towards achieving a more growth - friendly composition of public finances. a full, transparent and consistent implementation of the stability and growth pact and of the

, our commitment to fulfil our mandate by implementing consistent and systematic policy actions is deeply rooted in the institutional framework of emu on the one hand and in the ecb ’ s monetary policy strategy on the other hand. briefly, let me just recall in particular that this credible commitment is enshrined in the treaty, which guarantees for the independence of the ecb and thereby ensure that the ecb will have no impediment in pursuing its primary objective of price stability. turning to the elements of the strategy, i would like to highlight the clarity of the ecb ’ s objective, the comprehensiveness of the analysis leading up to the governing council ’ s policy decisions as well as the medium term orientation of our strategy. maintaining credibility for the conduct of monetary policy a second guiding principle for monetary policy conduct is that a central bank cannot ignore the promises – implicit or explicit – made in the past, when designing present policy. in a world of imperfect knowledge and bounded rationality, the track record of a central bank is the only guide for the public to build a view on the true objectives guiding monetary policy, the authentic motives that direct its actions, over and beyond the official purposes that it openly professes. this conference assigns such practical principle of policymaking the theoretical dignity that it deserves. the central question here is how a monetary authority profoundly committed to the objective to which it is mandated, should incorporate in its rule - based behaviour past deviations of inflation from levels that it considers consistent with price stability. a critical aspect to answering this question is the degree to which the economy learns about the economic landscape, including the central bank ’ s own inclinations. it is clear that a scenario in which central banks ’ inclinations and market views are perfectly aligned is unlikely to match reality. in fact, survey evidence about private sector expectations as well as the forecasting practice at central banks suggests that a considerable amount of learning takes place in the economy and that expectations seem to be quite heterogeneous among agents. under learning, the transmission of economic disturbances is amplified and prolonged. learning may be a source of excess sensitivity of the economy to shocks compared to a situation where agents form model - consistent rational expectations. moreover, long - term inflation expectations may over - react to shocks and drift endogenously, when disturbances can lead to a re - assessment by private agents of the functioning of the economy in general and the central bank ’ s behaviour in particular. in these circumstances, the credibility issue becomes