28.08.202512:08:20UTC+00ECB Minutes Reveal Split on Inflation Outlook

The minutes from the European Central Bank's (ECB) July meeting revealed a divergence among policymakers regarding the inflation outlook. Some participants contended that risks were more inclined to trend downward over the coming two years, citing diminished growth forecasts and the effects of U.S. tariff measures. Conversely, others cautioned that potential risks could still skew upward in the long term, due to uncertainties about energy prices and currency fluctuations. Though inflation figures were aligned with the target, officials acknowledged this alignment was partially due to temporary influences that might reverse, highlighting the ongoing debate within the ECB over whether to adopt a cautious or vigilant stance in policy formulation. In July, the ECB maintained steady interest rates, effectively signaling the conclusion of its current easing cycle after executing eight cuts in the past year, which reduced borrowing costs to their lowest point since November 2022. The main refinancing rate persists at 2.15%, while the deposit facility rate stands at 2.0%.