ECB’s Panetta says medium-term inflation expectations remain firmly anchored to target

For the June rate decision, it is crucial to assess the extent of the pass-through of higher energy prices.  The forward-looking picture seems to call for a recalibration of the monetary policy stance.  ECB will act in a timely and measured manner to stop the energy shock from turning into persistent inflation.  Consumers’ inflation expectations are rising and firms have already started planning price increases