• Members concurred that there was ample evidence that policy tightening was being transmitted strongly to broader financing conditions, including bank lending rates and money and credit flows
• It was felt, however, that, on the one hand, the decline in economic activity was less significant than could have been expected in reaction to the substantial monetary policy tightening over the past few months
• Members agreed that tightening the monetary policy stance by further increasing interest rates was warranted
• Members generally concurred that inflation developments had been broadly in line with the June projections
• Members concurred that the outlook for economic growth remained highly uncertain
• A question was raised about the extent to which the deterioration in the short-term growth outlook was related to the ECB’s monetary policy tightening
• It was argued that the deterioration in the outlook showed that monetary transmission was working and that the interest rate increases were doing their intended job
• Full accounts

At first glance, there doesn’t seem to be anything new to add to the debate on September. The ECB is continuing to maintain that the hit to credit conditions is largely evidence that monetary policy transmission is working but they have to be careful not to overdo it and bring about a real and more serious credit crunch in the economy.

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