kicked in, and energy is now fading, has moved now in may and is in slightly negative territory. but labour, and wages in particular, is playing a significant role as a driver of inflation. it's quite extraordinary because there have been more people employed, the average hours have been up, wages are increasing – we had 5. 2 % growth for the first quarter in the compensation per employee –, and the output is where it is : stagnant. so, there is an issue of unit labour cost – in other words, productivity – which clearly has an impact on inflation as well. we will continue to really monitor and dissect as well as we can this entire enigma of the labour market – which is, as i said, playing a critical role. it's especially important because many services which are playing a large part in our economy are labour - intensive, and wages in that respect play a key role. that is partly, by the way, the reason why we have – i was going to say upgraded, but it's not upgraded –, but why we have increased our projection for core inflation in both 2023 and 2024. my first question : i was a bit surprised by how strong this revision of the core inflation projection was. could you elaborate a bit on the reason? is that all due to wages, wage expectations, or are there other reasons behind that? my second question is about the decision today. was it unanimous? could you maybe give us a bit of a flavour about the discussion? on the first one, our revision to core inflation – i've started answering already in the previous question –, a lot of it is attributable to the unit labour cost. that's a large chunk of the revision. the rest is what you have in the monetary policy statement, which is past upward surprises. so, it's a different starting point, which is informed by data that came in after the last projection that we made in march. the latest data that we had in terms of inflation was from january. now, things obviously changed between those january data and the may data that we have incorporated because we cut off on the 23 may1. i think that's a small part of it. the large part of it is the unit labour cost. you asked me about the decision and the atmosphere. i have to tell you that it was quite a harmonious discussion and a very good and thorough economic discussion. as

euro is providing a positive impetus in the euro area economy. the economic and financial environment of the euro area is changing in many ways and the euro is having a beneficial impact. euro area economies are gradually becoming more interdependent, as evidenced by the following facts : a. there is clear evidence of a significant increase in both intra - and extra - euro area trade in goods since the launch of the euro. exports and imports of goods within the euro area rose from about 26 % of gdp in 1998 to around 32 % in 2006, and intraeuro area exports and imports of services increased from about 5 % to almost 7 % of gdp over the same period. the introduction of the single currency, as well as greater price and cost transparency, have promoted cross - border trade. the completion of a single market for services will also further facilitate trade in services. in addition, the rate of increase in extra - euro area exports and imports exceeded that in intra - euro area trade, rising from about 24 % of gdp in 1998 to almost 33 % in 2006. over the same period, extra - euro area exports and imports of services grew from about 8 % of gdp to almost 10 %. external factors, such as more sustained growth in world gdp than in euro area gdp, rising global trade integration and a sizeable increase in trade with the new eu member states, are also playing an important role. b. another area i would like to mention is foreign direct investment ( fdi ), which also includes merger and acquisition ( m & a ) activity. fdi accumulates over time and thus makes an important contribution to reshaping europe. intra - euro area fdi has grown considerably and is catching up with extra - euro area fdi. between 1994 and 2004, the stock of intra - euro area fdi grew from almost 14 % of euro area gdp to around 24 %. on the other hand, the stock of extra - euro area outward fdi have grown somewhat less rapidly over the same period, rising from 22 % to 30 % of euro area gdp. in particular, emu has been associated with a sharp increase in crossborder m & as of the manufacturing sector among euro area countries. conversely, the service industry has thus far benefited less from european financial integration. this also illustrates that more has to be done to remove the existing barriers to trade in services. c. the euro is acting as a catalyst towards a single market in financial services. to illustrate this, i