rising wages are set to restore some lost purchasing power, supporting consumption. as the economy weakens, however, job creation is likely to slow, and unemployment could rise over the coming quarters. fiscal support measures to shield the economy from the impact of high energy prices should be temporary, targeted and tailored to preserving incentives to consume less energy. fiscal measures falling short of these principles are likely to exacerbate inflationary pressures, which would necessitate a stronger monetary policy response. moreover, in line with the eu's economic governance framework, fiscal policies should be oriented towards making our economy more productive and gradually bringing down high public debt. policies to enhance the euro area's supply capacity, especially in the energy sector, can help reduce price pressures in the medium term. to that end, governments should swiftly implement their investment and structural reform plans under the next generation eu programme. the reform of the eu's economic governance framework should be concluded rapidly. inflation 2 / 4 bis - central bankers'speeches inflation declined to 10. 0 per cent in november, mainly on the back of lower energy price inflation, while services inflation also edged down. food price inflation rose further to 13. 6 per cent, however, as high input costs in food production were passed through to consumer prices. price pressures remain strong across sectors, partly as a result of the impact of high energy costs throughout the economy. inflation excluding energy and food was unchanged in november, at 5. 0 per cent, and other measures of underlying inflation are also high. fiscal measures to compensate households for high energy prices and inflation are set to dampen inflation over next year but will raise it once they are withdrawn. supply bottlenecks are gradually easing, although their effects are still contributing to inflation, pushing up goods prices in particular. the same holds true for the lifting of pandemic - related restrictions : while weakening, the effect of pent - up demand is still driving up prices, especially in the services sector. the depreciation of the euro this year is also continuing to feed through to consumer prices. wage growth is strengthening, supported by robust labour markets and some catch - up in wages to compensate workers for high inflation. as these factors are set to remain in place, the eurosystem staff projections see wages growing at rates well above historical averages and pushing up inflation throughout the projection period. most measures of longer - term inflation expectations currently stand at around two per cent, although further above - target revisions to some indicators warrant

mario draghi : ecb press conference – introductory statement introductory statement by mr mario draghi, president of the european central bank, frankfurt am main, 5 september 2013. * * * ladies and gentlemen, i am very pleased to welcome you to our press conference. i will now report on the outcome of today ’ s meeting of the governing council. based on our regular economic and monetary analyses, we decided to keep the key ecb interest rates unchanged. incoming information and analysis have further underpinned our previous assessment. underlying price pressures in the euro area are expected to remain subdued over the medium term. in keeping with this picture, monetary and, in particular, credit dynamics remain subdued. inflation expectations for the euro area continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 % over the medium term. at the same time, real gdp growth in the second quarter was positive, after six quarters of negative output growth, and confidence indicators up to august confirm the expected gradual improvement in economic activity from low levels. our monetary policy stance continues to be geared towards maintaining the degree of monetary accommodation warranted by the outlook for price stability and promoting stable money market conditions. it thereby provides support to a gradual recovery in economic activity. looking ahead, our monetary policy stance will remain accommodative for as long as necessary, in line with the forward guidance provided in july. the governing council confirms that it expects the key ecb interest rates to remain at present or lower levels for an extended period of time. this expectation continues to be based on an unchanged overall subdued outlook for inflation extending into the medium term, given the broad - based weakness in the economy and subdued monetary dynamics. in the period ahead, we will monitor all incoming information on economic and monetary developments and assess any impact on the medium - term outlook for price stability. with regard to money market conditions, these have also been influenced by a gradual reduction in excess liquidity. repayments of funds taken up in the context of the three - year longer - term refinancing operations reflect improvements in financial market confidence, some reduction in financial market fragmentation and the ongoing deleveraging by euro area banks. we will remain particularly attentive to the implications that these developments may have for the stance of monetary policy. let me now explain our assessment in greater detail, starting with the economic analysis. following six quarters of negative output growth, euro area real gdp rose, quarter on quarter, by 0