ECB's April decision to hold rates was a close call, signaling readiness to hike

(CNA, Frankfurt, May 28) According to the minutes of the European Central Bank's (ECB) April monetary policy meeting released today, the decision to keep the benchmark interest rate unchanged was a "close call." This is another sign that the bank is preparing to raise interest rates. AFP reports that the minutes show several policymakers specifically mentioned that keeping the ECB's main deposit rate at 2%, the level since last June, was a "difficult decision" and they did not oppose a rate hike. These officials ultimately decided to support the hold on the condition that the ECB emphasize in its external communications that it will closely monitor price trends and "remain committed to ensuring that monetary policy keeps inflation stable at the target level." The minutes also state that although current evidence shows that the second-round effects of rising oil prices, which could further fuel inflation, remain limited (e.g., wage increases), inflation is clearly facing upward pressure, and the conflict in the Middle East "may last longer than originally expected."