support the supply of credit to the economy, thus mitigating the impact of the downturn of the financial cycle. it is worth noting that the central bank of cyprus is one of the five countries in the eurozone that have enacted a positive, cycle neutral countercyclical buffer. the bottom line is that a stable price environment can foster economic growth and financial stability, while a stable financial system can make it easier for central banks to achieve their price stability objectives. turning now to another important question, is the ecb monetary policy setting bringing price stability? the recent data on inflation affirms that monetary policy transmission is effective and having an impact on inflation. in addition, the ecb has managed to keep inflation expectations anchored, as most measures of longer - term inflation expectations currently stand at around 2 per cent, which is the inflation target rate. as i mentioned earlier, this is important in order to avoid a wage - price spiral. although inflation has been reduced relative to 2022, it's still above the 2 % target, but some of the transmission of monetary policy decisions that have been made, still remains in progress. based on the recent ecb macroeconomic projections of september, a continued inflation correction in the euro area is anticipated, with inflation decreasing from 8. 4 % in 2022, to 5. 6 % in 2023, and further decreasing to 3. 2 % in 2024 and 2. 1 % in 2025. 2 / 3 bis - central bankers'speeches as regards the inflation outlook in cyprus, according to the latest cbc projections, also of september 2023, a significant reduction in the inflation rate is expected from 8. 1 % in 2022 to 3. 9 % in 2023. this downward trend is anticipated to continue, with inflation decreasing to 2. 7 % in 2024 and 2. 0 % in 2025. according to the same projections, the cyprus economy will continue to exhibit resilience, with the gdp growth rate expected to reach 2, 4 %, 2. 7 % and 3. 1 %, in each year from 2023 to 2025. unemployment in cyprus is expected to decrease to 6. 3 % in 2023 compared to 6. 8 % in 2022. in the years 2024 - 25 unemployment is expected at 5. 9 % and 5. 6 %, respectively. despite the lower inflation readings that i just mentioned, material uncertainty continues to persist for the eurozone. for instance, the recent spike

also led some to question whether markets are now less resilient in periods of stress. the value of sterling fell by 17 % against the us dollar over 2016, largely as market participants digested the impact of the eu referendum decision on its long - term sustainable level. although sterling was in the spotlight for much of the year, two key episodes stand out : the sharp adjustment in the exchange rate these issues are examined in more detail in a financial stability paper released by the bank in october 2015 which draws together a body of analysis looking across a number of previous events of this nature. http : / / www. bankofengland. co. uk / financialstability / pages / fpc / fspapers / fs _ paper34. aspx and by 15 % on a trade - weighted basis. all speeches are available online at www. bankofengland. co. uk / speeches immediately after the referendum result, and the so - called flash event in the early ( uk ) hours of 7 october ( chart 1 ). markets displayed resilience in the immediate aftermath of the referendum : the record 11 % depreciation of sterling against the us dollar that took place over the succeeding two trading days was accompanied by exceptionally high trading volumes ( chart 2 ). the market facilitated an orderly correction in the sterling exchange rate, while enabling individual participants to adjust their portfolios in response to the news, and can therefore be reasonably judged to have functioned effectively. this was aided in no small part by the well - telegraphed nature of the event. informed by the lesson of the chf de - peg a year and a half earlier, our market intelligence was that dealers engaged in extensive planning and preparation to cater for the possibility of sharp movements in sterling, including by reducing trading positions, pre - defining trading strategies and risk appetites for a range of scenarios, recalibrating algorithms and engaging in conversation with their clients to manage their expectations. the contrast with the events of 7 october – less than four months later – could not be stronger. in the early hours of the morning sterling depreciated by around 9 % against the us dollar in a matter of seconds, before quickly retracing almost all of the move. not only did this represent almost unprecedented volatility, but for short periods market depth on key trading platforms all but evaporated. the amihud measure of liquidity, based on the price impact of individual trades, suggests that there was a