than prior to the 2008 financial crisis. among other factors, mortgage debt repayments have reduced the average loan - to - value ratio. as a result, households are generally less likely to go into negative equity ( " under water " ) if house prices fall. ( financial stability report, – autumn 2022 ). in addition, many households have taken advantage of the low interest rate environment to lock in a long fixed - interest period, meaning most of them will be able to weather a potential negative equity situation for just as long. the dutch public debt - to - gdp ratio is developing favourably, but it is important to restore fiscal discipline. as mentioned earlier, large - scale and generic fiscal policy can lead to higher inflation, higher interest rates and higher public debt. high public debt in some southern european member states poses a risk, although even here the impact of rising interest rates on public finances is cushioned by the fact that public debt is financed on a long - term basis. if economic growth weakens, doubts about debt sustainability in countries with high debt - to - gdp ratios could resurface.

to russian gas supplies and european demand for gas both this winter and in the winter of 2023 - 24. the profound influence of energy prices means that the central bank has difficulty controlling current inflation. wage growth along with the increase in the minimum wage also pose an inflationary risk. one - off wage hikes are logical in the face of high inflation, but automatic wage indexation will make it all the more difficult to bring inflation down. finally, prolonged expansionary fiscal policy can boost inflation further. efforts to curb inflation are helped when fiscal policy works in the same direction as monetary policy. economic growth in the third quarter of this year was - 0. 2 % in the netherlands and + 0. 2 % in the euro area ( quarter - on - quarter ). dnb will issue new projections in december. it is quite possible that we will also experience economic contraction in the coming quarters. some cooling off of the economy is needed to reduce inflationary pressures. however, it is far from certain that a mild recession will be enough to curb high inflation. what is the ecb doing about this? the ecb is taking unprecedented measures to restore price stability. the ecb embarked on the course of normalisation in december 2021. at the time, inflation was already above target but was still expected to fall below 2 % again in the medium term. the war in ukraine and broadening inflationary pressures prompted the ecb to accelerate monetary policy normalisation. net asset purchases have since ceased ( the pandemic emergency purchase programme ( pepp ) in march and the asset purchase programme ( app ) in july ) and the ecb has raised policy rates three times. the two most recent rate hikes ( of 0. 75 percentage points ) were the ecb's largest rate hikes ever. monetary policy is expected to tighten even more in the coming months, thus raising interest rates further beyond neutral levels. © dnb current monetary policy is geared towards curbing demand, thus keeping inflation expectations anchored. the ecb is using higher interest rates to bring demand in line with more limited supply, thus creating a balance that will contribute to price stability. the rapid pace at which interest rates have been raised is linked to the pace at which inflation has increased and underlines the ecb's commitment to price stability in line with its mandate. the ecb will continue to tighten its policy until the medium - term outlook for inflation – a broader concept than just model projections – returns to target. monetary