APRIL 15, 2026 AT 04:29 PM
ECB policymakers reportedly wary of April rate hike as there is no evidence yet of second round inflation effects, according to Reuters citing sources
Importance
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- Second-round inflation effects are still possible and policy tightening remains firmly on the table but concrete evidence is needed before policymakers act, the sources said.
- Another source said that they cannot say what they will do at the next meeting, but currently does not have enough evidence to support a hike.
- Sources said labour markets are relatively soft which is limiting workers' room to demand higher wages.
- A source also highlighted that long term inflation expectations remain stable, domestic inflation is slowing, and rising petrol prices is hitting disposable incomes, which limits company ability to lift prices.
- Another source warned of credibility concerns. If inflation remains high and the ECB does noting, ECB commitment could be doubted.