Members of the ECB support possible interest rate hikes and express concern about the economy and events in the Middle East.

Some members of the European Central Bank (ECB) have expressed their support for leaving the door open to possible further interest rate hikes, according to the minutes of the monetary policy meeting held on October 25 and 26. Although on that occasion it was decided to keep interest rates at 4.5%, some members believe that the ECB should be prepared to raise them if necessary. The ECB was confident that the current rates were sufficiently restrictive and decided to take some time to assess inflation prospects and the evolution of the economy. The minutes also highlighted the importance of persistence and vigilance on the part of the Governing Council of the ECB. It was emphasized that it was essential to bring inflation to 2% in the medium term, but there were also warnings about the possibility of new challenges that could arise along the way. The Governing Council is convinced that inflation has reached its peak and will continue to decrease, but there are uncertainties regarding wage increases, budgetary policy, and geopolitical risks. Furthermore, the ECB acknowledges that the euro area economy is weak and economic prospects have worsened. Tighter financial conditions due to interest rate hikes and weak external demand are slowing down investments and consumption in the region. However, the minutes indicate that the data suggest more of a stagnation than a deep recession. The ECB is also concerned about events in the Middle East and how they could affect global energy supply. So far, market reactions have been limited, but there remains the possibility of negative consequences for growth and inflation.