ECB Gets Hawkish on Rates While BOE Starts to Split
Policymakers are starting to divide over whether sustaining growth is more of a priority than curbing inflation.
Christine Lagarde, president of the European Central Bank.
Photographer: Alex Kraus/BloombergThe European Central Bank and the Bank of England both adopted the new slower pace set by the Federal Reserve by raising their official rates by 50 basis points on Thursday, after all previously hiking by 75 basis points. However, there was a definite difference in tone emanating from the two European monetary authorities. Their policies look set to diverge in the coming months, with Frankfurt still anticipating faster inflation while London worries more about recession.
The ECB stressed the word “significantly” in regard to how much it expects to tighten future policy. ECB President Christine Lagarde repeatedly emphasised that another 50 basis-point tightening is likely at its next meeting in Feburary with more to follow, in what was possibly her most hawkish press conference to date.