relatively strongly, in sync with the growth in disposable income, by next year at the latest. given this development, the ecb staff have revised their april eurosystem projection slightly upwards. average growth is now expected to lie between 1. 6 % and 2. 2 % for 2004 and between 1. 8 % and 2. 8 % in 2005. as with any forecast, there are also downside risks. first and foremost, there is the oil price risk. calculated in usd, in the second quarter the price of brent crude oil rose by 37 % on the year ; calculated in eur, the figure was 29 %. in september, oil prices reached a new high. the price increases were driven - apart from speculative elements - by both the supply side and the demand side. the currently high energy intensity of the upturn reflects the cyclically - related increase in demand, particularly in the united states and china, where growth is centred. this is compounded by uncertainty with respect to the actual capacities available in production, transport and refining. if oil prices remain high, this could dampen both foreign and domestic demand. admittedly, the recent surge in the price of oil - at least in euro terms - was less pronounced than during the major oil crises of the 1970s and the early 1980s. furthermore, euro - area industry is now less dependent on oil than it was in the past. moreover, the situation on the industrial raw materials markets was somewhat less tense in the period under review. these factors are helping to offset the negative effects of an oil price rise on growth. oil prices had an immediate and considerable impact on general consumer prices. in august, the hicp inflation rate was 2. 3 % for the second month in succession. at the moment, there are signs that this figure will not drop below the 2 % mark until some time next year. bearing this in mind, the eurosystem has revised its projection on hicp inflation for 2004 slightly upwards to between 2. 1 % and 2. 3 %. for 2005, they expect a range of between 1. 3 % and 2. 3 %. the governing council must continue to monitor price developments closely. to what extent higher oil prices pose a threat to medium - term price stability will depend not least on the reaction of the social partners. second - round effects, which could trigger a wage - price spiral, are not yet apparent. however, the yield spread between indexed and non - indexed bonds does indicate

francois villeroy de galhau : monetary strategy and inflation in europe - what ’ s new? speech by mr francois villeroy de galhau, governor of the bank of france, at the suerf conference, new york city, 12 october 2021. * * * ladies and gentlemen, i am very happy to join you today for this discussion on " eu and us perspectives ". exactly one year after my previous intervention in this forum, i definitely see a change for the better in the economic climate in europe. europe is now the most vaccinated continent in the world. economic growth in the euro area has so far been stronger than expected and according to our latest forecasts, real gdp is expected to exceed its pre - covid level by the end of this year. if anything, we can perhaps say that uncertainty has shifted a little bit from the growth outlook to the inflation outlook, but i will come back to this point later. my speech today will address three interconnected issues : i. what are the key changes following the ecb strategy review? ii. where do we stand on inflation? iii. perspectives on the ecb's monetary policy up to and after the end of the covid crisis. i. the ecb ’ s monetary policy framework the unanimous adoption in july of the new monetary policy strategy was an important achievement for the eurosystem. let me pay tribute to christine lagarde, and sum up our review in three key messages : 1. the ecb has become a clearer and more credible inflation targeter after the clarification of its 2 % inflation target, which is now both symmetric and medium - term, as i advocated here one year ago. to anchor inflation expectations, it is important to have symmetry built into the strategy so that our 2 % inflation target is no longer perceived as a ceiling. our objective is also forward - looking to help guide inflation expectations, but it does not ignore the past either. in this context, our new forward guidance announced in july plays a crucial role as it should reinforce the ecb's credibility. by incorporating conditionality on both inflation forecasts and underlying inflation outcomes relative to our 2 % target, it allows us to maintain strong and persistent monetary policy action, going beyond transitory inflationary effects. this is particularly relevant at present. 2. the ecb is a pioneer among central banks in the fight against climate change. our action here is guided by two findings : first, we have acknowledged that