the future. work stream 4. communication as a monetary policy instrument. i may say straight away that we have been consistently developing our communication practice throughout the entire period of inflation targeting and continue to improve it now. we are to assess how well the society understands our communication, how predictable our actions are, and what areas of our communication we should prioritise in the future in order to strengthen confidence in the policy pursued. work stream 5. monetary policy and financial stability. the key topic within this block is the interaction and mutual influence of these two components of the bank of russia ’ s set of tools used to address the task of maintaining price stability and financial stability. finally, work stream 6. new challenges to monetary policy. within this block, we will analyse such long - term trends in economic development and finance as the introduction of digital currencies, innovations in the financial market, and climate and demographic changes. we will also estimate how these issues might impact the implementation of central banks ’ monetary policies in the future. we have already started our analysis within all these work streams. the results of the review will be discussed until the end of 2022 q1. following the discussion, we will compile a summary report in 2022 q2 and publish it on the bank of russia website together with analytical notes addressing individual issues. the summary report will present the bank of russia ’ s opinion on the topics reviewed and proposals regarding a possible adjustment of the parameters of the bank of russia ’ s monetary policy. the report will then be discussed with the public and the professional community. we are going to sum up the results by the middle of 2022. it would be possible to conclude whether we need to adjust our policy following the review only after we complete the analysis and the extensive discussion of its findings. before we make any decisions in this regard, we will continue implementing monetary policy in line with our current goals and approaches covered in the draft monetary policy guidelines for 2022 – 2024. 2 / 3 bis central bankers'speeches the results of the review will be taken into account when preparing the monetary policy guidelines for 2023 – 2025. 3 / 3 bis central bankers'speeches

box plot ) - 2 hicp hicpx hicpxx 25e - 75 percentile max - min 1999 -'22 pcci supercore median last known trimmed mean ( 20 % ) second, not only inflation but also gdp growth kept surprising us on the upside post - pandemic ( see figure 4 ), and q2 was no exception to that rule. an exclusive incidence of negative supply shocks would likely have generated disappointing growth outcomes alongside higher inflation. a recent analysis by dnb staff, which decomposes forecast errors of the ecb ’ s inflation projections since june 2021 into demand and supply shocks, indeed confirms that high inflation has been driven not only by negative supply shocks but to a significant extent also by positive demand shocks. figure 4. 2021 euro area inflation and growth higher than expected june projection 2021 realisation 2021 inflation core inflation gdp - growth this is not to disregard the large uncertainty surrounding the outlook for growth, but to underline the resilience of demand we have seen so far. the economy has held up well, and some of the factors behind the positive gdp surprise in q2 might well spill over to q3 ( think about tourism ). looking further ahead, recent indicators ( pmis ) do point at declining activity and business - and household confidence in the euro area. yet, even if this slowdown were to materialize, this in itself is unlikely to bring inflation back to our objective over the medium term. taken together, all this evidence is fueling my concerns that inflation will remain high for quite some time to come. in that context i find it striking that markets have shifted their expected path of euro area inflation further out in time and now expect headline inflation to peak only in 2023q1. on top of that, i see several upside risks to inflation. first, high energy and food price inflation may turn out more persistent than expected, as i for instance fail to see a swift resolution of the ukrainian conflict. second, inflation expectations could become de - anchored, should high inflation persist. although there is no clear evidence of a wage - price spiral yet, wages are creeping up on the back of an increasingly tight labor market. third, while in the euro area exchange rate pass - through to inflation is far from complete, a depreciating euro / dollar rate can have significant effects on headline inflation, particularly in a context of very high commodity prices. and the fourth risk relates to fiscal policy. recent budgetary decisions suggest that fiscal support