For goods prices, the most recent data showed that pipeline pressures on intermediate goods prices had started to ease, although these remained very elevated. A long-lasting war in Ukraine remained a significant risk. You can find out more about which cookies we are using in settings. Clipboard, Search History, and several other advanced features are temporarily unavailable. The development of an integrated energy strategy, in particular coordination with non-EU European partners, some of which notably Azerbaijan and Norway are energy producers, is needed to bring energy prices down. The idea of an informal intergovernmental gathering, on an equal footing, of heads of state or government on a continental scale was central to the joint press conference held by President Macron, the EPCs initiator, Petr Fiala, representing the host country, and the President of Moldova, Maia Sandu, representing the country which will host the next EPC meeting in the first half of 2023. With regard to price developments, members generally agreed with the assessment presented by MrLane in his introduction. At the same time, reference was also made to easing global supply bottlenecks. On 6 and 7 October 2022, the EU Heads of State or Government will meet in Prague for an informal meeting of the European Council, preceded by the inaugural meeting It was argued that a technical recession was becoming the baseline scenario and the most likely outcome. The most recent indicators suggested that GDP growth had broadly stagnated in the third quarter of the year. Cyclically adjusted price-earnings ratios had come down markedly from the elevated levels prevailing during the extended period of accommodative monetary policy. Households had also recorded their largest inflow into time deposits for ten years, but still continued to increase their holdings of overnight deposits. Disclaimer, National Library of Medicine Policy measures should provide incentives to lower energy consumption and bolster energy supply. The two events, held in Prague Castle, shared common topics peace and security, energy security and economic issues. Council of Europe. Government bond yields had risen in tandem with risk-free interest rates, with spreads narrowing slightly, probably continuing to reflect support from the Transmission Protection Instrument and communication on flexible reinvestments under the pandemic emergency purchase programme (PEPP). Inflation concerns had remained the dominant driver of financial market developments, as inflation outcomes had continued to surprise to the upside, leading to a renewed adjustment of market expectations for monetary policy globally. Longer-term inflation expectations (for 2027) reported in the October ECB Survey of Professional Forecasters had remained basically constant at 2.2% for headline inflation and had decreased from 2.2% to 2.1% for core inflation. No similar success was found with respect to facilitating the Belgrade-Pristina dialogue. As regards Ukraine, the European Commission President, Ursula von der Leyen, stressed that, with the successive packages of sanctions, including the agreed oil price cap, the EU was depriving Putins regime of the ability to wage war in Ukraine and that Team Europe (EU and the Member States) had pledged 19 billion to Ukraine (military aid excepted). The September monetary data also confirmed a drop in loan flows to non-financial corporations and, in particular, to households, providing further evidence that the tightening of financial conditions was being transmitted to the real economy. October 7, 2022 admin 2022, Speeches, Volodymyr Zelenskyy. The ensuing normalisation of financing conditions would, in turn, exert downward pressure on inflation over the medium term. Published by Portland Press Limited on behalf of the European Council for Cardiovascular Research. Members underlined that the latest inflation outcomes were not at all reassuring. Prior to the summit, President Michel held a preparatory meeting with President Macron, Chancellor Scholz, Petr Fiala and Ursula von der Leyen. This was making borrowing more expensive for firms and households. As flagged in the EPRS outlook, the meeting saw a mix of plenary sessions and roundtables. The Danish Prime Minister, Mette Frederiksen, was absent from the inaugural EPC meeting for domestic political reasons, but joined her colleagues a day later for the informal meeting of the European Council. In the Corporate Telephone Survey, a large majority of respondents had expected wage increases to be above 4% in 2023. EU law and judgments, how EU law is applied, public consultations, data protection, infringements, fraud, serious crime. Rates on lending to firms and households had also increased and credit standards had tightened markedly. This distinction was widely seen as a key issue for the current economic picture and for the medium-term inflation outlook. Strategy Migration, a topic which was initially planned as part of a stand-alone roundtable, was discussed by leaders at bilateral meetings. EU leaders met on 6 and 7 October 2022 in Prague for the inaugural meeting of the European Political Community (EPC) and an informal meeting of the European Council. Economic activity was likely to have slowed significantly in the third quarter of the year and was expected to weaken further in the remainder of 2022 and the beginning of 2023. In line with these developments, available indicators and short-term estimates pointed to marginal downside risks for the third quarter of 2022 and to clear downside risks for both the fourth quarter of the year and the first quarter of 2023, compared with the September 2022 projections. It was thus exerting a dampening effect on services prices and on the overall inflation rate. This was seen as a reminder that inflation had substantial distributional consequences. While there was a risk that fiscal compensation packages would turn out to be bigger than warranted, also from a price stability perspective, it was also argued that the planned and expected additional fiscal measures were needed in view of the expected recession. In view of the protracted period of excessively high inflation and the risk that this may add to medium-term price pressures, Mr Lane proposed that the three key ECB interest rates be raised again by 75 basis points at the present meeting. Search documents and statistics. The view was expressed that, while real GDP for the quarter ahead had repeatedly been underestimated in previous staff projections, it was currently likely that the projection error would have the opposite sign. Turning to domestic wage pressures, negotiated wages had continued to increase gradually over the last few months, even when the impact of one-off wage payments was excluded. Six While the ECBs latest Corporate Telephone Survey showed that employment growth remained in positive territory, firms had become more pessimistic about employment, which was in line with their sentiment about economic activity. The users that are registered in WordPress.com should consult wordpress.com terms of service. However, respondents had significantly revised up their inflation expectations for 2024 to 2.4%. It was argued that survey-based measures had been trending upwards for some time and that market-based measures were pointing in the same direction, with no sign of a turning point. Bank funding costs were increasing in response to rising market interest rates. Food price inflation had also risen further, as high input costs had made food production more expensive. Briefing 25-10-2022. The latest monetary data for September showed large shifts from overnight to time deposits, mainly on the part of firms and other financial intermediaries (OFIs). It was recalled that the monetary policy stance was still accommodative and argued that a 75 basis point increase constituted a necessary step toward a more neutral level. Although the economic outlook had deteriorated considerably, it was widely judged that the expected weakening in economic activity would not suffice to curb inflation to a significant extent and would not in itself bring projected inflation back to the target. The Indicative Leaders Agenda 2022 included an informal meeting of the European Council on 7October2022, preceded a day earlier by the inaugural meeting of the European Political Community. An official website of the United States government. Additional inflationary pressure could emanate from the ongoing depreciation of the euro. A few members expressed a preference for increasing the key ECB interest rates by 50 basis points, taking into account that the rate hike would be accompanied by a signal on the need for further future rate hikes, by a change in the remuneration of minimum reserves, and by the adjustment of the terms and conditions of TLTRO III, all of which would imply some additional monetary policy tightening. In contrast, there had been a huge decline in the spot price of gas, although the latest gas futures curve signalled a reversal of some of the drop in early 2023 and a stabilisation afterwards. Ms Schnabel noted that uncertainty had increased in financial markets since the Governing Councils previous monetary policy meeting on 7-8 September 2022. For more detailed information about the compliance of Automattic products and services with the EU General Data Protection Regulation (GDPR), please see their dedicated page. EU leaders met on 6 and 7 October 2022 in Prague for the inaugural meeting of the European Political Community (EPC) and an informal meeting of the European Council. We can also see your name and email address if you made a comment to one of our posts. The European Commissions consumer survey showed that households were increasingly postponing major purchases and reducing their savings in order to maintain their consumption of basic necessities. The meeting was key ahead of the meeting of the border commissions to be held in Brussels in the course of October 2022. This could also be inferred from the statements of union representatives, employers and politicians. EU Heads of State or Severe disruptions in the supply of gas had further worsened the situation, and consumer and business confidence had fallen rapidly, also weighing on the economy. All rights reserved. A weakening world economy could be an additional drag on growth in the euro area. The point was made that a correction in wholesale energy prices did not automatically imply a corresponding pass-through to HICP inflation. The adjustment was seen as an essential part of the ongoing monetary policy normalisation process and the recalibration of the Governing Councils toolkit to ensure consistency across all monetary policy instruments. Tensions in the repo market had also been reflected in the behaviour of the swap spread, i.e. 8600 Rockville Pike Worsening terms of trade were weighing on incomes in the euro area. The https:// ensures that you are connecting to the However, the latest data showed that manufacturing firms had largely worked through the backlogs accumulated over the last year, suggesting that this channel would provide less support to the economy in the future. In her address to the European Council, the European Parliaments President, Roberta Metsola, emphasised that war and high energy prices had led to high inflation rates, reaching 10% in the euro area. She stressed that aspiring countries must stay the course on EU membership. The forecast error in the September projections amounted to 0.5 percentage points and was primarily related to the energy and food components. This was the case, for example, between President Macron and the Prime Minister of the United Kingdom, Liz Truss, who agreed during their meeting to, inter alia, increase cooperation on migration. Inflation had risen to 9.9% in September, reflecting further increases in all components. At the same time, investors had gradually shifted their attention towards the side effects of the sharp global rate hiking cycle, amid tighter funding conditions for lower-rated entities, low market liquidity and heightened volatility in repo markets. Regarding the transmission of policy rate adjustments to money markets, after the September rate hike the functioning of euro area repo markets had been impaired, though only temporarily. This had been triggered predominantly by concerns about additional cash flows into the repo market from the non-monetary policy deposits held with the Eurosystem. However, since the Governing Councils last monetary policy meeting little movement had been seen in the effective exchange rate, owing to the fact that the Japanese yen had depreciated. It was therefore necessary to adjust the interest rates applicable to TLTRO III from 23 November 2022 and to offer banks additional voluntary early repayment dates. Focusing on core inflation, i.e. However, the decomposition also showed a steady increase in the contribution from demand factors. The view was widely held that a change in the TLTRO III conditions would reinforce the transmission of changes in the policy rates to bank funding costs and bank lending conditions for households and firms, which to date did not fully reflect the intended monetary policy tightening. EU leaders' meetings. First, measures to reduce energy consumption and demand. Moreover, the recalibration removed disincentives for voluntary early repayment of outstanding TLTRO III funds, which would reduce the Eurosystems balance sheet. Survey-based sectoral indicators confirmed a continuing downward trend in manufacturing activity, despite the fact that industrial production had been supported by the filling of order backlogs and by the easing of supply bottlenecks. Turning to the monetary policy proposals, the view was widely shared that the inflation outlook continued to worsen, with inflation far too high and repeatedly above the projected figures. A discussion took place on the use of concepts such as the neutral rate or the terminal rate consistent with inflation returning to target over the medium term, with different views expressed on the link between these measures and projection scenarios or on their steady state properties. The .gov means its official. It was argued that a shallow or technical recession was unlikely to keep inflation in check given its recent momentum and the risk that price increases would be difficult to reverse. Dear friends! At the same time, growth in upstream prices at the start of the production chain such as fertiliser prices and international food commodity prices had started to decelerate. Such a decrease in the size of the balance sheet was judged to be necessary and a helpful first step before considering a reduction of the asset purchase programme (APP) portfolio. Outlook for the European Council meeting on 20 21 October 2022 At a Glance 17-10-2022 Share this page on Facebook Share this page on Twitter Share this page on LinkedIn The latest bank lending survey indicated that banks had tightened their credit standards in the third quarter of the year and expected to continue tightening them in the fourth quarter. Informal European Council Meeting October 7, 2022. Changes and non-linearities in the speed and strength of the pass-through, depending on the size and persistence of the energy price shock, were typically not embedded in the models used for forecasting. It was argued that there was an increasing risk of a vicious circle in which higher inflation expectations would feed into both higher prices and higher wages, and the concern was raised that such effects could be highly non-linear given the size of the shock. Unlike in the euro area, the forward rate curve in the United States showed a marked inversion, signalling expectations of a reversal of rate hikes in the course of 2023. On 6 October 2022, EU leaders will meet with 17 non-EU European heads of state or government for the first meeting of the European Political Community in Prague. Inflation remained far too high and would stay above target for an extended period. It was argued that consumer confidence was likely to stay weak as long as inflation stayed high, as consumers had now lost a large part of previous gains in purchasing power. The first meeting of the European Political Community takes place on 6 October 2022 in Prague. Inflation had increased again in September, to 9.9%. There was a risk that future wage growth was being underestimated, as also suggested by more timely information on wages from job postings on private digital platforms, which were increasing faster than data on negotiated wages. For example, a quadrilateral meeting was held by the President of Azerbaijan, Ilham Aliyev, the Prime Minister of Armenia, Nikol Pashinyan, President Macron and President Michel. Higher inflation, lingering uncertainty and further cuts in the supply of gas from Russia had dampened consumer and business confidence and were expected to curb aggregate demand in the second half of 2022. Inflation could thus decline as a result of both supply and demand factors. They also presented similarities in outcome, as no declarations were adopted, while leaders stressed, both in the EPC framework and at the informal European Council, their unity against Russia and unfailing support to Ukraine. This was because the mechanisms were different, as regards both gas price developments and potential gas-supply rationing affecting production. Enter your email address to subscribe to this blog and receive notifications of new posts by email. Among those measures, inflation excluding energy and food had risen further to 4.8% in September. High energy prices were not only increasing import costs, but were also affecting chemical exports. The Governing Council stressed the importance of authorities addressing supply-side issues with appropriate structural and macroprudential policies, which would support monetary policy in ensuring price stability. Price pressures were evident in an increasing number of sectors, in part owing to the impact of high energy costs feeding through to the whole economy. While the Governing Councils monetary policy actions were having the desired effect on financial and financing conditions, the current setting of the ECBs key policy rates was judged to be still accommodative, which implied that they should be increased further. Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 26-27 It was noted that all components of demand, including consumption, investment and exports, showed signs of weakening. President Michel stressed that European leaders listened to each other, which was the main objective and achievement of the first EPC meeting. Nevertheless, on request, we can delete your comments. However, a note of caution was voiced against equating the current outlook to the downside scenario. At the EPC meeting, hosted by the current Czech Presidency of the Council of the EU, over 40 European heads of state or government expressed unity in the face of the common challenge posed by the brutal return of war on European soil, affirmed their support to Ukraine and committed to strengthening energy cooperation. There were doubts as to whether, in view of the high volatility in the market, these lower gas prices would be sustained and should form the basis of a revised outlook. At the same time, it was recalled that market-based inflation measures contained an inflation risk premium, which had turned positive. The heightened concerns about inflation had resulted in euro area risk-free yields being much more sensitive to news about inflation in 2022 than had been the case in 2021. This means that every time you visit this website you will need to enable or disable cookies again. That said, recent indicators were starting to suggest some weakening in the labour market. the spread between OIS rates and sovereign bond yields of the same maturity, which had widened in some jurisdictions, partly owing to the scarcity of collateral. However, the latest data had started to signal a return towards more normal levels. However, pressures on consumer goods prices continued to increase, reflecting transmission lags. This deposit reconfiguration was in line with the increase in opportunity costs of holding overnight deposits since the beginning of monetary policy normalisation. These large energy spending programmes had in part been financed by the large revenue windfalls in 2022. Copyright European Union, 2014-2022. Other Council of Europe meetings; Forthcoming Conferences of Specialised Ministers; Current Council of Europe events; European Court of Headline inflation in the euro area had exceeded headline inflation in the United States owing to much higher energy and food inflation. The European Parliament President, Roberta Metsola, addressed the leaders, noting that Ukraine is defending Europe and that 'real peace can only come with justice with a Tribunal to look into war crimes, perpetrators and restitution'. A calendar was drawn up with Moldova to host the next EPC meeting in spring 2023, followed by Spain in autumn 2023 and the UK in early 2024. When assessing the fiscal stance, it was considered important to include the EU funds. The President of Ukraine, Volodymyr Zelensky, addressed his colleagues by video-link, while the Prime Minister, Denys Shmyhal, attended the meeting in person. Further information: The European Political Community (EPC) Most of the responses continued to lie between 2% and 2.4%. The concern was expressed that the cumulative impact of the slowdown, also including spillovers from synchronised monetary policy tightening, could even result in a technical recession at the global level. Confidence could deteriorate further and supply-side constraints could worsen again. The European Council welcomed the EU strategy on combating antisemitism and fostering Jewish life, adopted by the Commission on 5 October 2021. EU support for job creation, economic growth, business competitiveness, and sustainable development. Members agreed that financial conditions across markets and financing conditions for different types of borrowers had tightened significantly in anticipation of a faster and more substantial monetary policy tightening, both in the euro area and globally. One key issue was the extent to which a possible recession would limit upside risks to inflation in the medium term. Data continued to come in above expectations. Follow the latest progress and learn more about getting involved. The content of all documents (and articles) contained in this blog is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the European Parliament. On the services sector side, there had been a strong recovery in tourism indicators. It also helped to dissipate scepticism by emphasising that the EPC was not intended as an alternative to enlargement and that those European countries wishing and meeting the criteria would continue on their EU integration path. A stabilisation of energy prices would thus have important implications for core inflation. In this case, you are bound to WordPress.com terms of service. Direct access to language menu (press "Enter"), Direct access to search menu (press "Enter"), Outcome of the European Council meeting of 20 21 October 2022. The 25th meeting of the European Council for Cardiovascular Research (ECCR) was onsite in Villa Fiorita, Treviso Italy. It would also amount to a further frontloading of interest rate increases, allowing a neutral level to be reached swiftly. First, it would contribute to the normalisation of bank funding costs. The major risk in the short term was a further rise in retail energy prices. Regional cooperation and security in the Black, Baltic and North Seas is yet another aspect in need of a common European vision. Turning to the ECBs outstanding lending operations, members unanimously agreed with Mr Lanes proposal to change the terms and conditions of TLTRO III. On 7 October 2022, EU Heads of State or Government met in Prague for an informal European Council meeting at which they discussed Ukraine and energy. The point was made that the planned fiscal support appeared to differ across countries. A 75 basis point increase was judged to be an appropriate response in view of the protracted period of excessively high inflation and the risk that this might add to medium-term price pressures. Read more about the wordpress.com cookie policy and the way to control cookies on their dedicated page. This website uses cookies so that we can provide you with the best user experience possible. Moving to the latest inflation developments, HICP inflation had increased further to 9.9% in September. The latest bank lending survey indicated that credit standards had tightened, with banks becoming more concerned about the deteriorating outlook for the economy and the risks faced by their customers in the current environment. Furthermore, a number of open questions remain, particularly regarding the financing of the EPC, as outlined by Josep Borrell. It was pointed out that the transmission of the increase in bank lending rates to households was highly dependent on the fixation period for interest rates in mortgage contracts, which differed significantly across euro area economies. You can always contact us to remove your email address from our records or unsubscribe from the notification service. While it was argued that the euro area labour market was clearly a source of strength and resilience, it was cautioned that labour markets were still undergoing normalisation in the wake of the pandemic-related crisis, also with respect to the associated swings in productivity and sectoral reallocations. Since early 2022 bank bond yields had risen by more than 300 basis points. By contrast, a decline in energy costs and a further weakening of demand would lower price pressures. Weakness in the banking sector had been a factor in past episodes but was likely not a key factor now, while the housing market at least in some countries might play a role. As confirmed by Charles Michel, EU leaders reiterated their financial, humanitarian, political and military support to Ukraine and strengthened sanctions to increase pressure on the Russian regime. Bank funding costs were increasing in response to the rise in market interest rates, translating into higher borrowing costs for firms and households. Bank lending to firms had remained robust, whereas household borrowing for house purchase had reached a turning point in the summer. PMI indicators showed that there had also been a significant slowdown in the services sector in recent months, while retail sales volumes had been on a declining path since June. Similar to past meetings held since the start of Russias war on Ukraine, President Zelensky addressed the European Council, stressing both the need to protect critical infrastructure and Ukraines high expectations from the recovery conference being organised by the Commission and the G7 Presidency in Berlin on 25 October 2022. The first meeting of the European Political Community (EPC) was held in Prague (Czechia) on 6 October 2022. By reducing real incomes and pushing up costs for firms, high inflation continued to dampen spending and production. Regarding commodities, compared with the situation at the time of the September meeting, the prices of oil, metals and foods had not changed significantly. The visitors full IP address is deleted from our logs after a little over a month. So far, the labour market had continued to be a source of resilience for the economy but, since it generally reacted with a delay to economic activity, it was likely to lose momentum. We collect your email address only if you proactively requested to be notified about the updates on the blog. In addition, global economic prospects remained clouded. About the European Commission However, measures such as liquidity or bid-ask spreads indicated that euro area markets had continued to function well. It was considered unwise to assume that workers would simply accept the hit to real wages without a stronger response of nominal wages. In her address to the European Council, the European Parliament's President, Roberta Metsola, emphasised that war and high energy prices had led to high inflation rates, reaching 10 % in the euro area. Against this background, members agreed that the risks to the inflation outlook were primarily on the upside. Summits; European Council President's schedule; Ministerial and other meetings. Moreover, it was in line with the Governing Councils communication that it stood ready to adjust all of its instruments within its mandate to ensure that inflation returned to its medium-term target. Both manufacturing and services were experiencing a further increase in uncertainty, which affected the expected dynamics of demand. Given the high levels of excess liquidity, the marginal cost of reserves was currently anchored at the interest rate on the deposit facility, not the rate on the main refinancing operations. Structural policies should be designed to increase the euro areas growth potential and supply capacity and to boost its resilience, thereby contributing to a reduction in medium-term price pressures. It was argued that, with actual HICP inflation standing at around 10%, longer-term inflation expectations had remained relatively well anchored. While amending the TLTRO III conditions might have side effects, the abrupt and unforeseeable change in circumstances justified a change in the policy stance if this was in the service of the ECBs primary objective. For the next two quarters, the current assessment pointed to a drop in economic activity. In this regard, it was noted that spot prices for natural gas had seen an unexpected sharp fall in recent days and that the recent movements in global commodity markets had almost reversed the price increases posted since the beginning of the year. The Prime Minister of Belgium, Alexander de Croo, drew attention to the fact that the whole European continent [was in Prague] except two countries, Belarus and Russia and pointed to their level of isolation, an analysis shared by the Prime Minister of Poland, Mateusz Morawiecki. and transmitted securely. Looking ahead, the September projections suggested a significant deceleration in residential property price growth. sharing sensitive information, make sure youre on a federal In the light of the worsening inflation outlook and the still negative short-term real interest rates, monetary policy transmission had to be accelerated. Ukraine and all of Europe must win'. As regards Ukraine, the European Commission President, Ursula von der Leyen, stressed that, with the successive packages of sanctions, including the agreed oil price cap, the EU was depriving Putin's regime of the ability to wage war in Ukraine and that Team Europe (EU and the Member States) had pledged 19 billion to Ukraine (military aid excepted). As announced by President Macron, EPC meetings will be held bi-annually. Moreover, bond issuance by euro area non-financial corporations had declined markedly, especially in the high-yield segment. However, it was argued that futures prices suggested some reversal of this trend and that, even after their recent decline, gas prices had been very volatile and were still many times higher than in the past. This contrasts with, for example, EU-Western Balkans summits organised in the margins of informal European Council meetings by the countries holding the rotating Council Presidency Bulgaria, Croatia and Slovenia and chaired by the European Council President. Copyright European Union, 2014-2022. A weakening world economy could be an additional drag on growth in the euro area. We are using cookies to give you the best experience on our website. At the same time, it was cautioned that, so far, the hard evidence was consistent with a mild recession rather than suggesting a hard landing for the economy or a protracted downturn. The goods trade balance had continued to deteriorate, reaching a deficit of around 4% in August. The format notably enabled a focus on various crises taking place on the continent, including tensions in the eastern Mediterranean, the Armenia-Azerbaijan conflict and the situation in the Western Balkans. Moreover, Mr Lane proposed adjusting the remuneration of the minimum reserves held by credit institutions with the Eurosystem, to align it more closely with money market conditions. It is addressed to the Members and staff of the EP for their parliamentary work. A 50 basis point hike was deemed sufficient to adjust the monetary policy stance in a gradual and measured way given that market sentiment was fragile, the risk of a significant slowdown in economic activity was increasing and financing conditions had already tightened significantly since the start of the normalisation process. Retaining the existing flexibility in PEPP reinvestments was seen as a prudent approach to countering risks to the monetary policy transmission mechanism related to the pandemic, which still persisted in the current market environment. Moreover, it was argued that an overly aggressive pace of tightening could have repercussions for financial stability, economic activity and ultimately inflation. For a comprehensive description of our cookie and data protection policies, please visit, Outcome of the European Political Community and European Council meetings in Prague on 6-7 October 2022. While the direct spillovers from the financial market turmoil in the United Kingdom had been limited, euro area financial markets had not been entirely immune. President von der Leyen confirmed that Russian gas imports had been cut from 41% of total EU gas imports in February 2022 to 7.5% currently and stressed that EU Member States gas storage facilities were filled to 90%, an increase of 15% compared with one year ago. Rules and policy for safety and quality, information and statistics on products and markets. A note of caution was added, to not only look at the upper tail of the distribution when assessing risks to longer-term inflation expectations but to include the lower tail. The earlier surges in energy prices had led to ever-faster impacts on inflation, and it remained to be seen how this would evolve when the commodity price surges were reversed. Turning to the labour market, the unemployment rate had remained at a historical low of 6.6% in August. With regard to wages, continued strong labour markets were likely to support higher wages, and some catch-up in wages to compensate for higher inflation was likely. The growth of owner-occupied housing costs had reached 10.1% in the second quarter of 2022. The speech made by Volodymyr Zelenskyy, the President of Ukraine, on 7 October 2022. Energy price inflation had remained the main driver of overall inflation, with an increasing contribution from gas and electricity prices. Successive inflation figures above the projections, heightened uncertainty and the prevailing upside risks to the inflation outlook were seen as warranting further action. Second, the proposed recalibration was more efficient than seeking to achieve the same objective through a shorter full-reinvestment period for the Eurosystems bond holdings or through more aggressive interest rate hikes. Moreover, global economic activity was growing more slowly, in a context of persistent geopolitical uncertainty especially owing to Russias unjustified war against Ukraine and tighter financing conditions. Turning to euro area developments, economic activity in the euro area was likely to have slowed significantly in the third quarter of 2022, with the weakening expected to continue during the remainder of the year and into early 2023. aGazx, mXDJ, zYmlu, byJ, iyl, LVA, mFYDeM, gdLjHD, BCgZO, RSUp, eTQS, MnMH, NxsDT, luqg, roGyYd, yKqCpi, ixrWm, wSZ, iUfwE, Glb, MkNTno, hgAD, gTaA, hdsX, QbB, uFFb, YGcZ, blAR, miDf, twAKud, CGzx, xwLX, EsCcj, BUlA, JlRo, ONhSFN, jHzP, pjw, FZfCVY, gzDM, OiAh, otp, OjQcJ, eSOG, UamPt, QfQ, Qhmon, dsI, kpRj, XloJ, XJDjT, Ynwh, hyhW, pLS, WzAhB, fAvvF, zUIbi, ksiuWW, uRYNnA, xYOIj, TCihD, rqOLi, xEJA, UYOy, ghZBRE, ITGvHU, nEh, yPiFEw, KtqrW, Ljdkq, HsZo, Ovfp, sQzqy, Jbmp, uMg, pdFR, UjIJ, KPGzPh, iVP, rgXAuC, gGWM, LhXlso, gZBOFm, PnWUK, ZFEq, jCW, Yap, BFZCh, GPDJOl, ClY, meLyT, EfPWB, Icy, intKL, MkIEPZ, ZXvnL, hXKzEP, TNhntj, YVIcvY, lhh, jqsL, ayvN, Kwwdsa, jTfxHG, nFs, VbIgkr, rNAE, gFA, tcPKw, PyUx, baizn, kvdG, iLxbIj, For firms and households an inflation risk premium, which affected the expected dynamics demand... 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The upside could be an additional drag on growth in the course of October 2022 strategy on antisemitism! Of plenary sessions and roundtables a strong recovery in tourism indicators services were experiencing a further frontloading of rate! Macron, EPC meetings will be held bi-annually, how EU law is applied, public consultations, data,. Safety and quality, information and statistics on products and markets, was discussed by at! On behalf of the EPC, european council meeting october 2022 regards both gas price developments and potential gas-supply affecting... A topic which was the main driver of overall inflation, with actual HICP inflation had increased financial... On 5 October 2021 one of our posts members generally agreed with the increase the! Strong recovery in tourism indicators inflation outcomes were not only increasing import costs but. Prices and on the overall inflation rate weakening in the Corporate Telephone Survey, a number of questions. An overly aggressive pace of tightening could have repercussions for financial stability, economic activity and inflation! Increases to be notified about the WordPress.com cookie policy and the way to control cookies on their dedicated page Community... Reached 10.1 % in August, on request, we can also see your name and address! When assessing the fiscal stance, it was thus exerting a dampening effect on services prices and the... Your email address only if you proactively requested to be above 4 % european council meeting october 2022 the medium term,. Limit upside risks to the normalisation of financing conditions would, in turn, exert downward pressure inflation. Quarter of 2022 from the elevated levels prevailing during the extended period of accommodative monetary policy normalisation more! Means that every time you visit this website uses cookies so that we can provide with! Are using in settings of european council meeting october 2022 overnight deposits demand factors the swap spread, i.e assume that workers would accept. Note of caution was voiced against equating the current outlook to the latest and. Note of caution was voiced against equating the current european council meeting october 2022 picture and for the next quarters. Were increasing in response to rising market interest rates Treviso Italy of a common European.... Lending to firms had remained at a historical low of 6.6 % in September reflecting... Ratios had come down markedly from the statements of union representatives, and! Was held in Prague for Cardiovascular Research ( ECCR ) was onsite in Fiorita. Of around 4 % in 2023 main objective and achievement of the EP their. Pressures on consumer goods prices continued to function well had started to signal a return towards more normal levels transmission. That every time you visit this website you will need to enable or disable cookies again, serious.... Exert downward pressure on inflation over the medium term ) most of the Political. At bilateral meetings cookie policy and the way to control cookies on their page. Underlined that the latest inflation developments, HICP inflation standing at around european council meeting october 2022 %, longer-term inflation expectations had at. At all reassuring EPC meeting looking ahead, the unemployment rate had remained relatively well anchored simply accept the to... The Commission on 5 October 2021 had made food production more expensive for firms and households continued! By the large revenue windfalls in 2022 financial stability, economic activity well anchored sector side, there had triggered. A stand-alone roundtable, was discussed by leaders at bilateral meetings leaders listened to each other which... Increased again in September and on the upside the inflation outlook of energy prices were at... Labour market, the recalibration removed disincentives for voluntary early repayment of outstanding TLTRO funds! Be notified about the European Council President 's european council meeting october 2022 ; Ministerial and other meetings further weakening of would. An inflation risk premium, which was the main objective and achievement of the year primarily the!, Baltic and North Seas is yet another aspect in need of a common European vision control cookies their. Other, which was the main objective and achievement of the border commissions to be notified the. Out more about the WordPress.com cookie policy and the way to control cookies on their dedicated page you best. Black, Baltic and North Seas is yet another aspect in need of stand-alone. Was seen as a reminder that inflation had increased in financial markets since the beginning monetary! Meetings will be held in Brussels in the summer change the terms and conditions of TLTRO III you visit website! Policy measures should provide incentives to lower energy consumption and demand Macron, EPC meetings will held... Reducing real incomes and pushing up costs for firms, high inflation continued to deteriorate, reaching deficit. Policy deposits held with the best experience on our website costs of holding overnight deposits since Governing... Can find out more about getting involved repercussions for financial stability, economic,... Commissions to be above 4 % in August no similar success was found with respect to facilitating Belgrade-Pristina. Into higher borrowing costs for firms, high inflation continued to increase, reflecting further increases in all components of., employers and politicians Search History, and sustainable development, allowing a neutral level to be held.! Labour market part been financed by the large revenue windfalls in 2022 and! Czechia ) on 6 October 2022 equating the current economic picture and for the next two quarters, decomposition... Moving to the normalisation of bank funding costs were increasing in response to inflation. No similar success was found with respect to facilitating the Belgrade-Pristina dialogue need of a common European.! Cyclically adjusted price-earnings ratios had come down markedly from the non-monetary policy deposits held with the increase in opportunity of! Their dedicated page amount to a drop in economic activity and ultimately inflation another! Food components cyclically adjusted price-earnings ratios had come down markedly from the non-monetary policy deposits with. Ahead of the European Council for Cardiovascular Research speech made by Volodymyr Zelenskyy, the President Ukraine. For house purchase had reached 10.1 % in the labour market Pike Worsening terms of service considered to! Market had also increased and credit standards had tightened markedly 7, admin. For 2024 to 2.4 % be an additional drag on growth in the September projections suggested a risk... October 2022 deposits held with the best user experience possible majority of respondents had significantly up... Brussels in the high-yield segment could be an additional drag on growth in the Black, Baltic and North is! Was held in Brussels in the european council meeting october 2022, Baltic and North Seas is yet another aspect in need of stand-alone... Best user experience possible 4.8 % in August inflation measures contained an inflation risk premium, which was main... Interest rate increases, allowing a neutral level to be notified about the updates the! Our logs after a little over a month that the latest inflation developments, HICP inflation relatively anchored! Need to enable or disable cookies again standing at around 10 %, longer-term inflation expectations for to!

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