households. the purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions. this allows us to effectively stave off risks to the smooth transmission of monetary policy. second, we decided to extend the horizon for net purchases under the pepp to at least the end of june 2021. in any case, we will conduct net asset purchases under the pepp until the governing council judges that the coronavirus crisis phase is over. third, the governing council decided to reinvest the maturing principal payments from securities purchased under the pepp until at least the end of 2022. in any case, the future roll - off of the pepp portfolio will be managed to avoid interference with the appropriate monetary policy stance. fourth, net purchases under our asset purchase programme ( app ) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year. we continue to expect monthly net asset purchases under the app to run for as long as necessary to reinforce the accommodative impact of our policy rates, and to end shortly before we start raising the key ecb interest rates. 1 / 3 bis central bankers'speeches fifth, we intend to continue reinvesting, in full, the principal payments from maturing securities purchased under the app for an extended period of time past the date when we start raising the key ecb interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. sixth, we decided to keep the key ecb interest rates unchanged. we expect them to remain at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 % within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics. together with the substantial monetary policy stimulus already in place, today ’ s decisions will support liquidity and funding conditions in the economy, help to sustain the flow of credit to households and firms, and contribute to maintaining favourable financing conditions for all sectors and jurisdictions, in order to underpin the recovery of the economy from the coronavirus fallout. at the same time, in the current rapidly evolving economic environment, the governing council remains fully committed to doing everything necessary within its mandate to support all citizens of the euro area through this extremely challenging time. this applies first and foremost to our role in ensuring that our monetary policy

to eurostat ’ s flash estimate, euro area annual hicp inflation decreased to 0. 1 % in may, down from 0. 3 % in april, mainly on account of lower energy price inflation. on the basis of current and futures prices for oil, headline inflation is likely to decline somewhat further over the 2 / 3 bis central bankers'speeches coming months and to remain subdued until the end of the year. over the medium term, weaker demand will put downward pressure on inflation, which will be only partially offset by upward pressures related to supply constraints. market - based indicators of longer - term inflation expectations have remained at depressed levels. while survey - based indicators of inflation expectations have declined over the short and medium term, longer - term expectations have been less affected. this assessment is also reflected in the june 2020 eurosystem staff macroeconomic projections for the euro area, which foresee annual hicp inflation in the baseline scenario at 0. 3 % in 2020, 0. 8 % in 2021 and 1. 3 % in 2022. compared with the march 2020 ecb staff macroeconomic projections, the outlook for hicp inflation has been revised downwards by 0. 8 percentage points in 2020, 0. 6 percentage points in 2021 and 0. 3 percentage points in 2022. turning to the monetary analysis, broad money ( m3 ) growth increased to 8. 3 % in april 2020, from 7. 5 % in march. strong money growth reflects bank credit creation, which is driven to a large extent by the acute liquidity needs in the economy. moreover, high economic uncertainty is triggering a shift towards money holdings for precautionary reasons. in this environment, the narrow monetary aggregate m1, encompassing the most liquid forms of money, continues to be the main contributor to broad money growth. developments in loans to the private sector continued to be shaped by the impact of the coronavirus on economic activity. the annual growth rate of loans to non - financial corporations rose further to 6. 6 % in april 2020, up from 5. 5 % in march, reflecting firms ’ need to finance their ongoing expenditures and working capital in the context of rapidly declining revenues. at the same time, the annual growth rate of loans to households decreased to 3. 0 % in april, from 3. 4 % in march, amid consumption constraints due to the containment measures, declining confidence and a deteriorating labour market. our policy measures, in particular the very favourable terms for our targeted longer - term refinancing operations