Geostrategic conflicts are persisting, and the outcomes remain uncertain. It is increasingly likely that this will drive a sustained rise in oil and natural gas prices, which could be reflected in higher energy and electricity costs over the autumn and winter. The euro area economy nevertheless continues to outperform expectations, and the incoming data for the third quarter is encouraging.

Under these circumstances the Governing Council of the ECB has decided to raise its key interest rates by a quarter of a percentage point, having left them unchanged at the previous meeting in July. The interest rate on the deposit facility, which best reflects the monetary policy stance, thus stands at 2.5%. Our assessment is that this interest rate level gives us the flexibility to respond appropriately to all possible outcomes of the war and their potential consequences for inflation. We will maintain our approach to future decision-making, deciding on monetary policy measures on a meeting-by-meeting basis.