our blog post published on the cnb website today, see adam and michl, 2023 ). the strong exchange rate made imports cheaper and tightened monetary conditions also for exporters. the large ones in particular had not been influenced by our monetary policy too much until then, since they were taking out loans in euros. 1 / 7 bis - central bankers'speeches i estimated that inflation should be below 10 % in annual terms within three months. the disadvantage of measuring inflation using year - on - year changes is that prices are compared to those observed a long time ago. if we want to know current developments in inflation, we should analyse the inflation momentum. at the cnb we define momentum as the three - month moving average of month - on - month changes in prices. we use seasonally adjusted and annualised data to make the figures comparable to the target – the cnb's 2 % inflation target is in annual terms. three - month moving averages of month - on - month changes in prices sound very complicated. moreover, they are seasonally adjusted and annualised... simply put, we can look at momentum as the inflation we would have if prices increased at the same pace as in the last three months. using the example of core inflation : in annual terms, core inflation has been coming down since october 2022. it peaked at 14. 7 % year on year in september 2022. it fell to 11. 5 % in march and 10 % in april. the momentum of core inflation peaked at 17 % in june last year. it is now 7 %. so, when the new bank board decided on rates for the first time in august 2022, the momentum was already falling. besides core inflation, the momentum has been declining for demand - pull inflation, which only includes consumer basket items correlated with demand ( cnb, 2022 ). it is an analogy to the supercore inflation measure used by our colleagues at the fed and the ecb. the momentum of demand - pull inflation peaked at 8 % in june last year. it is currently below 2 %. so, all the relevant inflation momenta are now falling ( adam and michl, 2023 ). however, i repeat that although headline, core and demand - pull inflation are falling and so are the momenta, inflation is still at unacceptable levels. therefore, we must not slacken in our fight against inflation. so far we have only succeeded in the first phase. therefore it is not

few would deny that where european institutions have been invested with executive power, they have used it well. competition policy has been effective with both large companies and large countries. monetary policy has achieved a high degree of policy credibility. and for the ssm it is perhaps too early to judge, though i am certain we would not have had such a rigorous clean - up of our banking sector without it. if we look at the rules - based approach, however, it is difficult to reach such a positive conclusion. the fiscal rules have repeatedly been broken and trust between countries has been strained. and for economic policies rules - based approaches – such as the macroeconomic imbalance procedure – have so far not attracted much ownership from national policy - makers. so in my view the conclusion from recent experience is clear : if we agree that further institutional convergence is needed in the structural domain, then our long - term goal must be to move from a rules - based system to one based on stronger european institutions. 9 i must stress however that to make such a step, we first have to respect and follow the rules we have now. if we look at monetary policy as an example, we did not begin by creating a new institution. this would have been impossible. we had a series of rules - based systems – the “ snake ”, the european monetary system, the exchange rate mechanism – the experience of which led us to create the single currency and the european central bank. these various stages were however essential, because they gradually built trust between countries and led to a convergence of views about how best to conduct monetary policy. so there is no question today that the rules can be ignored because institutions would be better. on the contrary, it is only by following our rules that we can establish the mutual trust on which future institutions can be built. it is essential that the european parliament makes this process its own and imbues it with democratic legitimacy. 5. conclusion the way forward for the euro area that i have described today may seem simple, but it isn ’ t. it requires vision and perseverance. all those involved have to play their part in a sustained economic recovery. see my speech at sz finance day 2015, frankfurt http : / / www. ecb. europa. eu / press / key / date / 2015 / html / sp150316. en. html. am main, march 2015, bis central bankers ’ speeches but i also recognise that, in the process, we must not lose