developments, according to eurostat ’ s flash estimate, annual hicp inflation was 2. 2 % in march 2006, compared with 2. 3 % in february and 2. 4 % in january. in the short run, inflation rates are likely to remain above 2 %, with the precise levels depending largely on developments in the more volatile components of the index. beyond the short term, changes in administered prices and indirect taxes are expected to significantly affect inflation in 2006 and 2007, and an upward impact may also be expected from the indirect effects of past oil price increases. at the same time, wage dynamics in the euro area have remained moderate over recent quarters and growth in wages is expected to remain contained, partly reflecting strong global competitive pressures, particularly in the manufacturing sector. over the recent past, moderate wage trends have helped to dampen domestic inflationary pressures ; looking ahead, it is crucial that the social partners continue to meet their responsibilities in this regard, also in the context of a more favourable economic environment. risks to the outlook for price developments remain on the upside and include further increases in oil prices, a possibly stronger pass - through of oil price rises into consumer prices than currently anticipated, additional increases in administered prices and indirect taxes, and – more fundamentally – stronger wage and price developments than expected due to second - round effects of past oil price increases. turning to the monetary analysis, the latest developments confirm that the stimulative impact of the low level of interest rates remains the dominant factor behind the high trend rate of monetary expansion. moreover, the annual growth rate of credit to the private sector has continued to increase over recent months, with borrowing by households – especially loans for house purchase – and nonfinancial corporations rising rapidly. overall, strong monetary and credit growth in an environment of ample liquidity in the euro area continues to point to upside risks to price stability over the medium to longer term. to sum up, annual inflation rates are projected to remain elevated in 2006 and 2007, and the economic analysis indicates that the risks to price stability remain on the upside. given the strength of monetary growth and the ample liquidity situation in a context of improving economic activity, crosschecking the outcome of the economic analysis with that of the monetary analysis supports the assessment that upside risks to price stability over the medium to long term prevail. it is essential that medium - term inflation expectations remain firmly anchored at levels consistent with price stability. accordingly, the governing council will continue to monitor very closely all developments

philip r lane : structural change and central banking - some research priorities panel contribution by mr philip r lane, member of the executive board of the european central bank ( ecb ), to the 5th joint regional financing arrangements research seminar organised by the european stability mechanism, frankfurt am main, 24 september 2021. * * * structural changes ( especially digitalisation and the carbon transition ) can be expected to be highly influential in driving macroeconomic outcomes over the next decade and are of first - order importance for central banks. in the european context, public policy is firmly geared to promoting a smooth and comprehensive digital and green transformation of the european economy, including through the design and funding of the next generation eu ( ngeu ) programme. in the spirit of a research seminar, my aim today is to outline some issues that call for further research a€ “ both inside policy institutions ( including central banks ) and in academia. these secular forces are intertwined. in particular, digitalisation can do much to facilitate a lowercarbon economic model, while shifts in global patterns of energy consumption are clearly influenced by the power needs of different strands of the digital economy. a wide variety of modelling and analytical approaches are required to gain the necessary comprehensive understanding of the economic, financial and social impact of these structural changes, including the interaction effects between digitalisation and the carbon transition. digitalisation and the greening of the economy require significant levels of investment, both from the private sector and the public sector. in addition, public transfers and subsidies will be required to ensure an inclusive approach. the funding of digitalisation and the carbon transition poses significant challenges for the financial system, the tax system and the public finances. while these funding decisions will be heavily influenced by political economy considerations, the design of optimal funding schemes remains a high research priority. for central banks, it is essential to monitor these underlying structural changes and assess the implications for economic growth and inflation dynamics along both cyclical and trend dimensions. the direct and indirect effects of digitalisation and the carbon transition on the financial system and the drivers of the equilibrium real interest rate also warrant intensive study, especially in view of the possible implications for the monetary transmission mechanism. in particular, the net impact of these structural changes requires a full - scale, intertemporal general equilibrium approach : shorter - run and longer - run forces may work in opposite directions, while the nature of the impact on the supply side of the economy needs to be assessed jointly with the implications for the various components of aggregate expenditure : public