• Some members felt that the data available since the last meeting had not increased their confidence that inflation would converge to the 2% target by 2025
• These members also viewed risks to the inflation outlook as being tilted to the upside
• Wage growth had surprised to the upside and inflation seemed to be stickier
• Services inflation momentum was very high, and the pace of domestic disinflation had been overestimated
• It was also suggested that further significant wage pressures were in the pipeline
• All of this suggested that the last mile, as the final phase of disinflation, was the most difficult
• It was argued that a small undershooting of inflation would be much less costly than a continued overshooting
• These considerations suggested that cutting interest rates was not fully in line with the principle of data-dependence
• There was a case for keeping interest rates unchanged at the current meeting
• But willingness to support Lane’s proposal to cut interest rates was expressed, notwithstanding the reservations put forward
• Full accounts

As a reminder, the ECB proceeded with a 25 bps rate cut in their June decision. But evidently, there are certain policymakers that are not quite in agreement with the move. That definitely presents some interesting happenings behind the scenes, even though there was a united front when speaking to the public.

This article was written by Justin Low at www.forexlive.com.