- term aim. at the same time, in the light of the continued subdued inflation outlook, monetary policy has to remain highly accommodative for a prolonged period of time to support underlying inflation pressures and headline inflation developments over the medium term. we will, therefore, closely monitor inflation developments and the impact of the unfolding monetary policy measures on the economy. our forward guidance will ensure that financial conditions adjust in accordance with changes to the inflation outlook. in any case, the governing council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry. let me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp increased by 0. 3 %, quarter on quarter, in the third quarter of 2019, following growth of 0. 2 % in the second quarter. this pattern of moderate growth reflects the ongoing 1 / 3 bis central bankers'speeches weakness of international trade in an environment of continued global uncertainties, which has particularly affected the euro area manufacturing sector and has also dampened investment growth. at the same time, the services and construction sectors remain more resilient, despite some moderation in the latter half of 2019. incoming economic data and survey information point to some stabilisation in euro area growth dynamics, with near - term growth expected to be similar to rates observed in previous quarters. looking ahead, the euro area expansion will continue to be supported by favourable financing conditions, further employment gains in conjunction with rising wages, the mildly expansionary euro area fiscal stance and the ongoing – albeit somewhat slower – growth in global activity. the risks surrounding the euro area growth outlook, related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets, remain tilted to the downside, but have become less pronounced as some of the uncertainty surrounding international trade is receding. euro area annual hicp inflation increased to 1. 3 % in december 2019, from 1. 0 % in november, reflecting mainly higher energy price inflation. on the basis of current futures prices for oil, headline inflation is likely to hover around current levels in the coming months. while indicators of inflation expectations remain at low levels, recently they have either stabilised or ticked up slightly. measures of underlying inflation have remained generally muted, although there are further indications of a moderate increase in line with previous expectations. while labour cost pressures have strengthened amid tighter labour markets

completed. at the same time, integration in retail markets is not yet sufficiently advanced. as regards the post - fsap strategy, although the ecb is still in the process of formulating its views on the matter, we have already identified at least three important elements. first, the focus should be on the effective and consistent implementation of the fsap at the national level. new legislative initiatives at the community level should be kept to a minimum and only introduced if strictly necessary. in this respect, the implementation of the lamfalussy framework represents a unique opportunity to achieve a consistent regulatory and supervisory framework for financial services. indeed, the experience so far gained with the implementation of the framework in the securities field is broadly positive. it should be recognised, however, that there is still scope for improvement, for instance with regard to striking the right balance between the two levels of community legislation ( core principles and technical details ). second, the policies relating to the regulatory and supervisory framework should be complemented by and closely coordinated with other relevant policies for financial services, for instance competition policy. third, incentives should be provided for the private sector to play its role in exploiting the opportunities offered by public action. where appropriate, mechanisms should be provided to facilitate coordinated approaches among market participants. moreover, the eurosystem has requested that a single euro payments area ( sepa ) be created for the euro area from 1 january 2008, meaning that citizens and enterprises could make payments throughout the euro area from a single bank account, using a single set of payment instruments, as easily and safely as in the national context today. in addition, national infrastructures should migrate to a pan - european payments infrastructure by the end of 2010. we appreciate the commission ’ s support for the sepa project. the ecb is also in a regular dialogue with the banking industry to seek market participants ’ support for these objectives. i am now ready to answer your questions.