3 july, the risks of an increase in inflation appeared to have grown. albeit in a context of wage moderation, the first signs of an acceleration in costs were visible. other warning signals were coming from market expectations : inflation expectations measured on the basis of long - term index - linked government bonds were tending to rise ; the prices of inflation swaps signaled growing fears of inflation for long - term maturities as well. against this background, the governing council of the ecb decided to raise reference rates by 0. 25 percentage points. in the days following the rate hike, inflation expectations derived from the financial markets ceased their upward trend ; it appears that they are now beginning to fall back. by taking timely action we intend to help to avert the risk that the rise in the international prices of energy and food products might set off a spiral between expectations and the setting of wages and prices, and to bring inflation gradually back down to levels consistent with price stability in the medium term. households ’ disposable income is defended by combating the rise in inflation, which erodes purchasing power, lowers the real value of financial wealth and is a drag on consumption and growth. we estimate that in italy the acceleration in prices recorded since last summer has reduced the growth in disposable income by more than one percentage point, by three points if the losses of the real value of financial wealth are also taken into account ; it can reduce consumption by more than two points by the end of next year. average per capita earnings of employees, after tax and social security contributions, are not much higher today in real terms than they were fifteen years ago. meanwhile, unit labour costs have increased by more than 30 per cent, compared with about 20 per cent in france and practically nil in germany. this gap between the spending capacity of workers and the competitive capacity of firms reflects the meagre growth in productivity, the persistently high level of taxation and social security contributions, and the effect of inflation ; it is at the root of the stagnation of our economy. price stability is a prerequisite for the resumption of growth. a price - wage spiral would be an illusory remedy and one that monetary policy must oppose. if monetary policy is credible, even if it cannot insulate the economy from the fluctuations of commodity prices, it can cushion their effects on expectations and domestic prices. a prompt monetary adjustment reduces the risk of tardy but violent corrections. italian banks ’ income and capital

dear teachers, dear students, dear guests, welcome to the central bank of the republic of kosovo. i am very honored to mark world savings day with you today. this day is a very important day for the financial system and now its marking has become a tradition in the cbk. this day, which was first marked in 1924 at the international savings banks congress in milan, italy, is now celebrated worldwide by organizing various activities aimed at cultivating culture and developing savings habits. we begin to learn the habits and culture of saving from childhood. the most common phrase we hear from an early age is a saved euro is an earned euro. this phrase best demonstrates the importance of savings. savings help us achieve our dreams and goals. on the importance of savings, i would like to quote one of the most successful investors, warren buffet, who said “ do not save what is left after spending ; instead spend what is left after saving ”. cbk, within the framework of its financial education program, organized a competition for kosovo elementary school students in grades 6 - 9 to participate in the competition for the selection of the best essay on savings and finance under the motto “ savings for a better future ”. this competition was very creative, had a lot of good essays and the commission had a lot of hard work in selecting the winner. i can say that there were no losers in this competition. all the essays were very good and i have the honor of today awarding the most distinguished awards. by participating in this competition you have honored the cbk and i promise that we will be with you in the future as well by organizing other activities. i hope this competition has helped you to better understand the importance of finances and savings and i believe that some of you are already dreaming of this profession and you may be part of the cbk or other financial institutions in the future. dear students, i wish you great results in school, which i believe will be very easy with the help of your excellent teachers