In light of the current unpredictable inflation outlook and the risk of significant impacts on both inflation and growth, the Governing Council emphasized the importance of remaining flexible and ready to respond swiftly, if needed, according to minutes released today.
The Council will determine any changes to interest rates at each meeting based on economic data, without committing to a predetermined rate path, the minutes add.
In September, the European Central Bank (ECB) unanimously kept interest rates at 2%, reiterating that this level is appropriate.
The ECB considers the 2% interest rate level “sufficiently robust to manage impacts.”
The minutes highlight that the ECB intends not to react to “moderate fluctuations in inflation” and will only alter interest rates if there is “a significant deviation” from the medium-term inflation target of 2%.
The minutes indicate that the Governing Council believes its communication should maintain a cautious, neutral tone, remaining uncommitted regarding future rate decisions.
ECB President Christine Lagarde, Chief Economist Philip Lane, and other Council members have reiterated that the 2% rates are suitable, and decisions will be made at each meeting based on economic data.
However, Vice President Luis de Guindos has warned of geopolitical risks and the weak economic growth of the eurozone.
