Governing Council members at the European Central Bank widely agreed that increases in both headline and core inflation had become a major concern for households and businesses, but divided on whether medium-term inflation expectations were becoming de-anchored and how soon to react, the official Account of April’s ’s meeting shows.

Some pressed for an end to APP “as soon as possible,” paving the way for rate hike, while others argued that such an aggressive adjustment to the policy stance might lower growth while having little effect on near-term inflation.

Council members also disagreed on the pace of normalisation implied by the ECB’s previously stated commitment to gradualism, with some viewing a swift adjustment of the monetary policy stance towards a neutral position as necessary, while others argued that no such reappraisal of the monetary policy path was required (see MNI SOURCES 1: ECB Seen Making Two To Three 25-BP Hikes In 2022), although a majority agreed decisions on the future of APP and rates could be deferred until the June meeting, with the possibility of deciding to end net asset purchases already at the end of the second quarter or early in Q3.