HomeLive CommentsECB divided over rate cut at June meeting

ECB divided over rate cut at June meeting

Accounts from ECB’s June meeting reveal that “almost all members” supported the 25bps rate cut. However, there was a significant “dissenting view”, arguing that recent data and ongoing inflationary risks “did not support the case for a rate cut”.

The dissenters pointed to “stickiness” in inflation and highlighted the risk that geopolitical factors could exacerbate inflation this “stickiness”. They also warned that diverging from US interest rate path could “risk adding to inflationary pressures via exchange rate effects”.

Looking ahead, ECB remains committed to ensuring inflation returns sustainably to the 2% medium-term target. Members emphasized maintaining a data-dependent, meeting-by-meeting approach without pre-committing to a specific rate path, allowing for full policy flexibility.

Full ECB meeting accounts here.

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