The European Central Bank (ECB) is reportedly considering slowing down interest-rate hiking with only a 50 basis-point increase next month, according to a Bloomberg report citing people close to the matter.
People familiar with the matter, who asked not to be identified because the Governing Council’s talks are secret, said that early indications suggest there is currently insufficient momentum for another 75 basis point hike. The less drastic measure is likely to be favored by the majority, they suggested, unless inflation suddenly spikes again.
Among the reasons stated are rising recession risks, the probability of weakening consumer-price pressures, and the chance that a half-point increase in the deposit rate to 2% will bring it near to a so-called neutral level that no longer boosts the economy.
