The European Central Bank's September meeting account showed all policymakers agreed that inflation risks remained tilted upwards. The record, published on 8 October, described exceptional energy-price volatility and pervasive uncertainty after the Governing Council raised rates in September. It also showed officials considered their decisions should remain data-dependent and meeting-by-meeting. The account did not commit the bank to a further increase at its October meeting.
The Governing Council raised the deposit facility rate to 2.50% at the 9-10 September meeting, its second increase of the summer. Higher energy costs linked to renewed Middle East hostilities had lifted headline inflation and market expectations for policy rates. Policymakers also noted that higher government-bond yields were tightening financial conditions. The published account therefore documented both upside price risks and constraints on economic activity.
ENERGY RISKS DOMINATED
The account said persistent energy prices and possible food-price pressure could keep inflation above the ECB's projections. Officials nevertheless distinguished those headline effects from broader domestic price pressures. Reuters reported policymakers saw little evidence so far of dangerous second-round effects through wages and prices.
Longer-term inflation expectations remained anchored around the ECB's 2% target, according to several policymakers speaking on 8 October. Core inflation was also described as more stable than the headline measure. These factors supported a measured response even as the Governing Council kept further tightening available.
OCTOBER DECISION REMAINS OPEN
A Reuters poll of 73 economists found nearly all expected the ECB to keep rates unchanged in October, with most anticipating a move in December. That survey reflected the balance between elevated headline inflation and more contained underlying trends. Market and survey expectations are not commitments by the Governing Council.
The account adds detail to the ECB's September decision but leaves the timing of any further increase unresolved. Policymakers will assess incoming inflation, wage and activity data before the 29 October meeting. Energy-market developments and evidence of second-round price effects will be central to that decision.