the euro area ”, economic bulletin, issue 4, ecb. 5. for the increasing importance of services in the harmonised index of consumer prices, see baldwin, r. ( 2022 ), “ globotics and macroeconomics : globalisation and automation of the service sector ”, paper presented at the ecb forum on central banking, sintra, 27 - 29 june 2022. 6. however, 1. 1 % of workers are still enrolled in job retention schemes. 7. compensation per employee. 8. international energy agency ( 2022 ), “ the role of critical minerals in clean energy transitions ”, revised versin, march. 9. kuik, f., morris, r. and sun, y. ( 2022 ), “ the impact of climate change on activity and prices – insights from a survey of leading firms ”, economic bulletin, issue 4, ecb ; bua, g., kapp, d., kuik, f. and lis, e. ( 2021 ), “ eu emissions allowance prices in the context of the ecb ’ s climate change action plan ”, economic bulletin, issue 6, ecb. 10. lagarde, c. ( 2022 ), “ monetary policy normalisation in the euro area ”, the ecb blog, 23 may.

also for ensuring that our monetary policy impulse reaches individual firms and households. if spreads in some countries respond in a rapid and disorderly way to an underlying change in risk - free rates, over and above what would be justified by economic fundamentals, our capacity to deliver a single monetary policy is impeded. in this situation, a change in the policy stance can be followed by an asymmetric response of financing conditions, regardless of the credit risk of individual borrowers. in such conditions – when we have what we describe as unwarranted fragmentation – preserving policy transmission is a precondition for returning inflation to our target. the normalisation of our monetary policy will naturally lead to rising risk - free rates and sovereign yields. and, as euro area sovereigns are starting from different fiscal positions, it can also lead to a rise in spreads. but in order to preserve the orderly transmission of our policy stance throughout the euro area, we need to ensure that this repricing is not exacerbated and distorted by destabilising market dynamics, leading to a fragmentation of our original policy impulse. that risk of fragmentation is also affected by the pandemic, which has left lasting vulnerabilities in the euro area economy. these vulnerabilities are now contributing to the uneven transmission of the normalisation of our policy across jurisdictions. the governing council is therefore acting in two ways. first, we will use flexibility in reinvesting redemptions coming due under the pandemic emergency purchase programme ( pepp ) to preserve the functioning of the monetary policy transmission mechanism. in other words, those redemptions can, as appropriate, be invested within the eurosystem in bond markets of jurisdictions where orderly transmission is at risk. we have decided to apply this flexibility in reinvesting redemptions coming due in the pepp portfolio as of 1 july. second, we have decided to mandate the relevant eurosystem committees, together with the ecb services, to accelerate the completion of the design of a new instrument for consideration by the governing council. the new instrument will have to be effective, while being proportionate and containing sufficient safeguards to preserve the impetus of member states towards a sound fiscal policy. this decision lies squarely within the ecb ’ s tradition. in the past, the ecb has made use of separate instruments to target inflation and to preserve the functioning of the monetary policy transmission mechanism. measures to preserve transmission could be used at any level of interest rates – so