with recent survey evidence. with pipeline pressures remaining significant, a still historically large share of firms in the manufacturing, retail and services sectors plan to raise prices further over the coming months ( slide 8, left - hand chart ). of course, such surveys say nothing about the size of future price increases, meaning inflation could still slow. however, the surveys do not signal a fast unwinding of price pressures on the back of the expected decline in aggregate demand. uncertain inflation outlook calls for “ robust control ” approach to monetary policy the implication for monetary policy is unambiguous : it would be imprudent for a stability - oriented central bank to chart the future course of interest rates on the assumption that a slowdown in demand will reduce the need for adjusting the monetary policy stance. today ’ s energy shock affects potential output directly through its impact on productivity and the capital stock. together with historically tight labour markets, this makes it unlikely that the euro area economy will operate under much economic slack over the medium term. on the contrary, if the hit to the supply side is significant, there is even a risk that the output gap turns positive earlier than expected despite weakening demand. recent inflation dynamics underscore these risks. although surveys have been pointing to a sharp slowdown in demand for several months now, underlying inflation continues to rise in the euro area. trimmed mean inflation, which is a good indicator of underlying inflation at a time of persistent energy and food shocks, increased to 6. 9 % in august, similar in scale to the situation in the united states ( slide 8, right - hand chart ). uncertainty about the persistence of inflation therefore continues to call for a “ robust control ” approach to monetary policy, which reduces the risks that medium and long - term inflation expectations move further away from our 2 % target. the pivotal role of inflation expectations in driving a potential wageprice spiral reinforces this approach. my remarks today demonstrate that such a “ robust control ” approach is firmly guided by the mediumterm inflation outlook. although the outbreak of the pandemic, and the war in ukraine, have measurably reduced the ability of central banks and other professional forecasters to correctly anticipate the broad future path of inflation, long and variable lags in the transmission of monetary policy still require policy to be calibrated on what central banks think is the most likely future course of the economy, also taking into account the impact of their own actions on aggregate demand and price formation.

, helping europe to cope with the shocks facing the global economy by maintaining sound and stable macro - economic policies, to support flexibility and innovation, and to continue with structural reforms. in this respect, the thoughts i have shared with you here today confirm that his m. buti, a. turrini, p. van den noord and p. biroli, 2008, “ defying the “ juncker curse ” : can reformist governments be re - elected? ”, european commission economic papers no 324. ideas remain valid for our times. europe must strive to deliver growth, jobs and low inflation consistently over time under the lisbon strategy for growth and jobs, which aims to make europe fit for the future. one might be tempted to think that this long term agenda may not fit quite well with the shorter term challenges that we are currently facing, which is to get out of the current crisis. it would be a mistake. we have seen that some of the causes of the current crisis lie in the inappropriate functioning of certain markets, notably the financial sector. we also noted that the rigidities in the labour and product markets weigh on the ability of economic policies to effectively address some of the shocks that we are currently experiencing. in particular, monetary policy in the euro area is constrained by the rigidities in the labour markets that risk dis - anchoring expectations of price and wage setters. this is the reason why, even in the current deteriorating economic conditions, monetary policy has to continue to be framed within the established ecb strategy in which the primary objective of monetary policy is price stability. if this was not the case, monetary easing could be perceived to be the result of a change in priorities by the ecb, in favour of economic growth or financial stability rather than price stability. economic agents could expect that monetary policy would now be ready to accommodate higher inflation expectations, under the form of higher nominal rates of return or higher wages. this would lead to much worse macroeconomic results over the short and medium term. going forward, the stance of monetary policy will continue to be adapted on the basis of the primary objective of price stability – a rate of inflation close but less than 2 %. the stronger is the underlying growth of productivity, especially in the services sector, the higher are the prospects to achieve such a target, the greater the room for manoeuvre for monetary policy to adapt to the weakening of economic conditions. the current economic difficulties do not justify any stop, or reversal