noticeably more expensive than they were two years ago. the core inflation rate, which excludes volatile energy and food prices, is not yet trending clearly downwards. the flash estimate put core inflation at 5. 4 % in june, which is somewhat higher again on the month. underlying inflation, then, is more persistent than the decline in the headline rate suggests. we have failed to achieve our target of 2 % for two years now. and the latest eurosystem staff projections show that a timely return to the 2 % target is anything but certain. the experts are expecting euro area inflation to average 5. 4 % this year, followed by 3. 0 % in 2024. and even in 2025, we will have not yet fully accomplished our mission because inflation is projected to stand at 2. 2 %, which would still leave us above our target inflation rate. 3 / 7 bis - central bankers'speeches moreover, the projection for core inflation had to be revised upwards markedly. it now stands at 2. 3 % for 2025. on top of that, upside risks to the price outlook predominate. in other words, looking at the projections, inflation rates are more likely to be higher than lower. thus, unexpectedly strong growth in wages or profit margins, say, could drive inflation higher over the medium term. this is the backdrop against which the ecb governing council decided on 15 june to raise key interest rates by a further 25 basis points. furthermore, in her press conference, ecb president christine lagarde left little doubt that a further interest rate move was to be expected in july. we will follow a data - dependent approach when deciding whether key interest rates need to be raised further after the july meeting. in my view, we still have a way to go. it is crucial that we bring inflation back down to 2 % in a sustainable manner. to achieve that, interest rates will have to be at levels that are sufficiently restrictive. and we will also have to keep interest rates at that level – wherever it may be – for an extended period of time. in this respect, the image of nearing the interest rate peak is actually wrong. after all, the climb to a summit is, of course, usually followed by an immediate descent. i prefer christine lagarde's analogy of climbing to cruising altitude here. 1 an aeroplane also doesn't leave this altitude immediately after reaching it. i can't tell you whether we are on a short, medium

. maturing defined benefit plans and newly set up defined contribution schemes may have different propensities to invest in risky assets, and thereby affecting the relative price of the assets. looking at available data does indeed suggest many factors impacting on the asset allocation of the different types of pension schemes. at the same time, the shift between types of pension schemes transfers the longevity risk of the individual into a future income risk for the individual. in the defined contribution pension system, a longer life can only be counterbalanced by either saving more, working longer or through unrealistically high rates of return on investments. none of these remedial options are available ex post. individuals with retirement income stemming from such pensions schemes therefore run the risk of outliving their resources, leaving only a reduction their standard of living when they are old. furthermore, as retirement income becomes subject to a greater number of risks, plan beneficiaries will have to provide for these challenges, thus putting them in a less good position to bear risk in their remaining portfolio behaviour and altering their behaviour as investors on financial markets. in this context it is noteworthy that most people have substantial problems giving a reasonable estimate of how much money at retirement they will have had to accumulate in order to sustain their current standard of living. few people realize how large the capital stock will need to be and how low the rate of withdrawal has to be, irrespective of the asset allocation chosen. individuals have a poor appreciation of the financial implications of longevity. it is the responsibility of public authorities to further promote financial education programmes aimed at enhancing not only the awareness of citizens on the financial risks they face in their decisions but also the ability to judge the options at their disposal. for instance, the rate of return on the investments is crucial to the value of definedcontribution pension schemes at retirement. this raises a number of challenging questions with respect to the structuring of the payout options for these schemes. the main options include lump - sum payments, programmed withdrawals and annuities. the choice amongst them depends on the balance to strike between flexibility and protection from longevity risk, and is most certainly subject to the country context. to this regard, financial markets need to be sufficiently developed and to offer adequate financial products, which enable individuals to convert the accumulated assets into a stream of income at retirement. it requires the ability from individuals to carefully assess their situation and make important financial choices for themselves. from a public policy point of view,