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MNI BRIEF: ECB Accounts Show "Solid Majority" For Sept Hike


Upgraded inflation forecasts for this year and next, along with concerns a pause in interest rate hikes could signal an end to the tightening cycle drove a "solid majority" to back ECB chief economist Philip Lane's proposal to hike rates by 25 bps to 4%, the minutes of the September policy meeting showed. (MNI WATCH: ECB Hikes 25Bp, Signals Peak May Be Near)

The ECB hiked rates with financial markets leading up to the meeting split on its likely outcome. Some governing council members argued that "a pause could give rise to speculation that the tightening cycle was over, which increased the risk of a rebound in inflation".... requiring "another wave of monetary tightening later on".

The governing council also "agreed with the Executive Board proposal to continue applying flexibility in reinvesting redemptions falling due in the PEPP portfolio". ( MNI POLICY: ECB Saves Look At Balance Sheet Cuts For Late '23).

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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