Archive

ECB Refi Rate 4.25% (consensus 4.25%) in Jul-24

• The ECB kept key interest rates unchanged in July, following June's rate cuts, to manage persistent inflationary pressures while supporting economic recovery.
• Future interest rate decisions will be data-driven and flexible, avoiding pre-commitments to specific rate paths and based on ongoing assessments of inflation, economic data, and monetary policy transmission.
• Economic and financial risks, including geopolitical tensions and global trade dynamics, will influence the ECB's policy adjustments to ensure the stability and effectiveness of monetary policy transmission.

ECB: September Cut Not Yet Determined

• The ECB unanimously held its policy rates in July, as widely expected after June’s cut, and refused to pre-commit to any outcome in September.
• Its policy will depend on the data in the weeks and months ahead, with some policymakers likely to firm up their positions before September’s highlighted meeting.
• We still expect another cut in September, encouraged by the Fed and BoE also easing policy. However, their premature steps could swiftly require reversals in 2025.

By Philip Rush

EA Inflation Stable Enough for the ECB

• The final EA inflation print confirmed the flash at 2.52% in June, with services refusing to slow from 4.1%. Median inflation rates broadly rebounded, stabilising the 3mma.
• Divergences between member states’ underlying pressures are balancing slightly above a target-consistent pace. The ECB is unlikely to be concerned about that.
• Stability in the ECB’s medium-term forecast seems sufficient for it to cut again in September. Tight labour markets may yet renew pressures and pause cuts later.

By Philip Rush

France: Back To The Future?

• Contrary to all the opinion polls, the ‘cordon sanitaire’ has held once again in France, keeping Marine Le Pen’s Rassemblement National out of any plausible government for now at least. But the cost of this is high in both the short- and medium-term.

By Alastair Newton