At the interest rate meeting in June, the euro central bank announced that it would be abandoning years of ultra-loose monetary policy due to the ongoing surge in inflation in the euro area.
(Photo: IMAGO/IlluPics)
Frankfurt At the regular interest rate meeting in June, the monetary watchdogs of the European Central Bank (ECB) discussed a stronger rate hike in July. “A number of members expressed an initial preference to keep the door open for a larger hike at the July meeting,” said minutes of the June 8-9 interest rate meeting released by the ECB in Frankfurt on Thursday.
The Governing Council must retain its discretion to adjust the size of the interest rate hike if new information is available for the July interest rate meeting that significantly affects the medium-term inflation outlook, the minutes said.
At the interest rate meeting in June, the euro central bank announced that it would be abandoning years of ultra-loose monetary policy due to the ongoing surge in inflation in the euro area. Finally, it was decided to hold out the prospect of the first interest rate hike since 2011 for July. The most important interest rates are then to be raised by 0.25 percentage points each.
For the interest rate meeting in September, she also signaled a possibly even stronger hike. Only six days after the regular June interest rate meeting, the monetary watchdogs then came together for a special meeting. A strong widening of the yield spreads (spreads) of the government bonds of the euro countries had put the ECB in a mood of alarm.
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Monetary authorities agreed that a gradual approach should not necessarily be interpreted as slow action in small increments, the minutes said. This means that it can also go beyond a quarter of a percentage point.
In any case, it had been underlined that a gradual approach should not compromise the Governing Council’s duty to do what is necessary at all times to ensure price stability over the medium term. The next ECB interest rate meeting is scheduled for July 21.
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