Monetary policy strategy

The ECB’s monetary policy strategy provides a comprehensive framework within which we take our monetary policy decisions and communicate them to the public.

Quantitative inflation target

The ECB’s Governing Council considers that price stability is best maintained by aiming for 2% inflation over the medium term. Inflation is measured by the Harmonised Index of Consumer Prices (HICP).

The Governing Council’s commitment to the 2% target is symmetric. This means that we consider negative and positive deviations from the target to be equally undesirable.

When the economy is operating close to the lower bound on nominal interest rates, it requires especially forceful or persistent monetary policy action to prevent negative deviations from the inflation target from becoming entrenched. 

The Governing Council seeks to achieve price stability over the medium term. This allows for short-term deviations of inflation from its target, provides the necessary flexibility and makes it possible to cater for other considerations.

Integrated analytical framework

The Governing Council bases its decisions on an integrated analytical framework that includes all relevant factors, building on two interdependent analyses: the economic analysis and the monetary and financial analysis. These analyses form the basis for the Governing Council's assessment of the economic outlook, of how monetary policy measures are transmitted to the economy and reach businesses and people, and of the risks to price stability.