- The ECB has reiterated its strong commitment to fighting inflation, which it says remains ‘far too high’ and will stay above target for an extended period.
- However, the ECB seems much more worried about the outlook for growth. The ECB expects a further weakening in economic activity over the remainder of this year and the beginning of next year. The major risk remain a long lasting war in Ukraine with a rise in the price of food and energy. Risks to the economic outlook are seen as clearly on the downside.
The new statement suggests a less aggressive rate hike path ahead:
- The reference to “next several meetings” regarding future rate hikes was replaced: the governing council “expect to raise interest rates further.”
- Furthermore in the previous statement, the Governing Council expected “to raise interest rates further to dampen demand” while now, ” monetary policy is aimed at reducing support for demand
You can now read the full whitepaper at the link below
