Frankfurt (Germany), 27 Aug. (LaPresse) – “Some members noted that, in light of the new data emerging from the June meeting – which had strengthened the case for a further tightening of monetary policy – they would not have opposed a rate rise at the current meeting.” This is stated in the minutes of the ECB meeting held on 22–23 July. According to the minutes, these members considered it unlikely that a further rate rise would not be necessary. In their view, the analysis carried out in June had shown that rates would need to rise further in all the scenarios considered, including the most favourable one. “The value of the ‘wait-and-see’ option was therefore limited,” the minutes state. These members attached greater weight to the upside risks to inflation and considered it necessary to bring rates into “slightly restrictive” territory, given that the current level was not holding back the economy. A delay in the monetary policy response, according to this view, could have delayed the return of inflation to 2 per cent and required greater tightening later on. Despite these assessments, “all members were prepared to support” the decision to keep rates unchanged, provided that the communication reaffirmed the ECB’s firm commitment to bringing inflation back to the 2 per cent target in the medium term.
ECB minutes: “Some members would not have ruled out a rate rise as early as July”
Frankfurt (Germany), 27 Aug. (LaPresse) – “Some members noted that, in light of the new data emerging from the June meeting – which had strengthened the case for a further tightening of monetary policy – they would not have opposed a rate rise at the current meeting.” This is stated in the minutes of the ECB meeting held on 22–23 July. According to the minutes, these members considered it unlikely that a further rate rise would not be necessary. In their view, the analysis carried out in June had shown that rates would need to rise further in all the scenarios considered, including the most favourable one. “The value of the ‘wait-and-see’ option was therefore limited,” the minutes state. These members attached greater weight to the upside risks to inflation and considered it necessary to bring rates into “slightly restrictive” territory, given that the current level was not holding back the economy. A delay in the monetary policy response, according to this view, could have delayed the return of inflation to 2 per cent and required greater tightening later on. Despite these assessments, “all members were prepared to support” the decision to keep rates unchanged, provided that the communication reaffirmed the ECB’s firm commitment to bringing inflation back to the 2 per cent target in the medium term.