##50 billion, thus returning to the levels prior to the 2018 - 21 downturn. this improvement reflects both gradually rising house prices and new investment in real estate. taking into account the slight increase in financial liabilities ( around €10 billion ), net household wealth decreased to around €10, 150 billion, 8. 2 times disposable income ( compared with 8. 4 times at the end of 2019 ). net of the increase in the consumption deflator, real net wealth declined by more than 6 per cent compared with the end of 2021, with about half of that decrease due to inflation. the heightened volatility in the markets has affected the composition of households'financial assets. deposits and cash continued to grow, albeit at a slower pace, and reached one third of total assets by the end of june, their highest level in more than 20 years. after a prolonged downturn, the share of direct investment in medium - to long - 4 / 9 bis - central bankers'speeches term bonds increased slightly in the first half of 2022, driven by the rising opportunity cost of holding more liquid assets. this partly offset the decline in the share of assets held in the form of equity and other shareholdings ( in italy, these consist mainly in family ownership stakes of small and medium - sized enterprises ), which was linked to the fall in financial market prices. bonds, equity and other shareholdings together account for slightly less than 30 per cent of total financial assets. investment in asset management products, although declining, remained positive in the first half of the year ; its share amounts to more than one third of total financial assets. this expansion, underway since the early 2010s, was driven by investment fund subscriptions and purchases of insurance policies ; investment in pension funds remained limited. growth in this sector could be fostered through a more widespread use by institutional investors of alternative investment funds specializing in the valuation and selection of complex projects, such as corporate restructuring. these funds, which operate over a medium - term horizon, can play a crucial role for the financing of smaller firms, especially when it comes to expanding the scale of operations and investing in innovation. given the high uncertainty surrounding the economic outlook, diversifying investments adequately, with the necessary focus on risk mitigation, is even more expedient to protect savings from rising inflation and seize any opportunities that may arise in the sectors benefiting from higher interest rates. initiatives aimed at helping savers to make informed decisions and, more

cent inflation objective in the second half of 2024. a similar picture emerges from the expectations implied by inflation - linked swap prices and from the surveys conducted in october, such as the ecb's survey of monetary analysts and polls by other private entities. conversely, households'expectations as captured in the ecb's survey are slightly higher, at 5 per cent over the next twelve months and at 3 per cent at the three - year ahead horizon. this is likely due to a more backward - looking approach in the formation of expectations and to the considerable weight of the most volatile components of inflation in the consumption basket of the less well - off households. wage growth – in italy and in the euro area as a whole – has remained moderate so far. in italy, negotiated wages net of one - off components grew at an annual rate of 0. 9 per cent in the second quarter, 0. 3 percentage points higher than at the beginning of the year, mainly owing to the renewal of public sector contracts. negotiated wages also accelerated in the euro area on average, reaching 2. 5 per cent. labour costs are expected to rise later this year and the next, as wage increases could be granted to offset the loss in workers'purchasing power, in some countries also in connection with minimum wage rises. hence, there are currently no clear signs of a significant de - anchoring of inflation expectations from the price stability objective. the sharp weakening in economic 2 / 9 bis - central bankers'speeches activity and the modest share of inflation - linked wages in the euro area as a whole also seem to be containing the risk of a sustained and widespread price - wage spiral. the process of normalizing monetary conditions underway since late 2021, which involved the finalization of the asset purchase programmes and the decision to start raising monetary policy rates, is aimed at decisively countering the possibility of the two aforementioned risks materializing. last thursday, the ecb governing council raised the key interest rates by 0. 75 percentage points, bringing the overall increase since 21 july to 2 percentage points. this has been a substantial step forward in the reabsorption of monetary accommodation, significantly moving the eurosystem deposit facility rate away 6 from the negative levels that had been necessary to counter the risk of deflation and to limit the fallout from the pandemic crisis. according to market participants'expectations, oneyear real interest rates are still very low and may turn barely positive from the end of 2023 onwards. the decision to