MNI BRIEF: ECB GovCo Split On 75bp Sept Hike, Accounts Show

ECB policymakers were split over whether to raise key interest rates by 50- or 75bp in September, the official account of last month’s meeting shows (see: MNI SOURCES: Both 75, 50BP Still In Play As ECB Readies Hike).

A “very large” number of the Governing Council supported the 75bp hike proposed by chief economist Philip Lane, which was “judged to be a proportionate response to the further upward revisions to the inflation outlook and an important signal that the Governing Council was determined to bring inflation back to its 2% target in a timely manner.”

However, “some” members argued that 50bp would signal policymakers were serious about curbing inflation while not exacerabating a likely recession next year. A "sustained path towards more neutral rate levels might prove sufficient to return inflation to the Governing Council’s 2% target over the medium term once transitory shocks had faded,” they said. Going in to the September meeting, MNI had highlighted the split on the Governing Council over the scale of rate hikes. (MNI SOURCES: Both 75, 50BP Still In Play As ECB Readies Hike)