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Accounts on rates: "Very large" number preferred 75bp, "some" preferred 25bp

ECB
  • "Turning to the size of the interest rate increase, a very large number of members, in line with Mr Lane’s proposal, expressed a preference for raising the key ECB interest rates by 75 basis points. A 75 basis point increase was judged to be a proportionate response to the further upward revisions to the inflation outlook and an important signal that the Governing Council was determined to bring inflation back to its 2% target in a timely manner. "
  • "Some members expressed a preference for increasing the key ECB interest rates by 50 basis points. While a 25 basis point increase was seen as clearly insufficient to address the current inflation outlook, it was argued that a 50 basis point hike would be large enough to signal determination in proceeding with the interest rate normalisation that the Governing Council had begun at its July meeting. With the looming risk of a recession, which would mitigate inflationary pressures, an increase of 50 basis points, if part of a sustained path towards more neutral rate levels, might prove sufficient to return inflation to the Governing Council’s 2% target over the medium term once transitory shocks had faded. "
  • "At the end of the discussion, all members joined a consensus to raise the three key ECB interest rates by 75 basis points, while reaffirming that the Governing Council’s decision remained data-dependent and that a 75 basis point increase should not signal that the Governing Council intended to agree on interest rate increases of a similar magnitude at its future meetings."
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