result, as i described here last year, monetary policy can accompany the economic recovery. 9 but the projected convergence remains reliant on the substantial cumulative impact of past policies, which are locked into the supportive financial conditions present today. significant monetary policy accommodation is still needed to support the further build - up of domestic price pressures and headline inflation developments over the medium term. our latest, unanimous decision ensures that the necessary monetary policy support remains in place. this support has a number of elements, including the net asset purchases until the end of 4 / 6 bis central bankers'speeches the year, the sizeable stock of acquired assets and the associated reinvestments, and our enhanced forward guidance on the key ecb interest rates. our decisions also reflected the desire of the governing council to retain the ability to react to potential future shocks to ensure the sustained convergence of inflation to our medium - term aim. they embed precise elements of state contingency into our forward guidance. by clearly specifying and communicating our reaction function, we are able to act in a consistent and predictable fashion. acting in this way helps reduce any market uncertainty that might arise concerning our future actions. 10 let me restate our recent decisions on our policy instruments. first, our anticipated ending of asset purchases in december this year is subject to incoming data confirming the medium - term inflation outlook. moreover, the app can always be used in case contingencies materialise that we do not currently foresee. second, we announced that we intend to maintain our policy of reinvesting the principal payments from maturing securities purchased under the asset purchase programme ( app ) for an extended time after the end of net purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. third, we conveyed our expectation that the key ecb interest rates will remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with our current expectations of a sustained adjustment path. this enhanced forward guidance clearly signals that we will remain patient in determining the timing of the first rate rise and will take a gradual approach to adjusting policy thereafter. the path of very short - term interest rates that is implicit in the term structure of today ’ s money market interest rates broadly reflects these principles. as indicated at the ecb watchers ’ conference earlier this year, 11 after the end of net asset purchases, the main tool

along the pricing chain. 7 domestic producer price inflation for non - food consumer goods is growing at its highest rate since february 2013. producer price inflation in the services sector – where wages represent around 40 % of costs – has also picked up. that said, higher wage growth does not mechanically translate into higher inflation. even if wages continue to rise as we expect, we cannot exclude that structural factors beyond the central bank ’ s control might impede the transmission of wages into consumer prices. for example, more intense competition through globalisation or e - commerce might act to compress margins. at present, we do not see much evidence that such factors have affected inflation in the euro area. what is key is that inflation expectations remain well anchored. here we are seeing some positive signs. for example, the latest ecb survey of professional forecasters ( spf ) shows longer - term inflation expectations stable at 1. 9 %. so, overall, there is growing evidence that broad - based economic growth is beginning to generate positive pricing dynamics. but uncertainty arising from economic developments lingers throughout the various stages of this process. implications for monetary policy so what does this imply for our current monetary policy? we have set out three conditions that must be in place for our net asset purchases to end. we need to see the convergence of inflation towards our aim over the medium term ; we need to have sufficient confidence that this convergence will be realised ; and the inflation path needs to show resilience and be self - sustaining without additional net purchases. assessing these conditions is a forward - looking exercise, because the full effects of monetary policy are felt only after long lags. we have to rely on our projections, the probability distributions surrounding them, and the extent to which they are dependent on our own monetary policy actions. in terms of convergence, the latest projections see headline inflation reaching 1. 7 % in each of the next three years. inflation excluding food and energy – a simple measure of underlying price pressures – is expected to climb to even higher levels over the same horizon. these are the latest in a series of projections which foresee inflation converging to our aim over a policyrelevant medium - term horizon. importantly, over the course of the past year, that convergence 3 / 6 bis central bankers'speeches path has held firm, and the timing of when we expect to attain our objective does not appear to have receded further into the future. our confidence in the inflation path is also rising, on the