The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

ECB Watch: The ECB tries hard not to catch markets on the hop

The governing council appears to be split between raising rates incrementally, at 25bp a time, and the short sharp shock of a 50bp hike.

The European Central Bank’s 25 basis point increase in interest rates at the beginning of August was widely expected. After all, at his monthly press conference four weeks earlier ECB president Jean-Claude Trichet had announced that the governing council would meet in person on August 3 rather than, as had always been the case in previous years during the summer break, by teleconference.

The message was clear and well understood in the financial markets. But was it really necessary to employ such an unorthodox signal and disrupt the holiday plans of the 18 members of the governing council and the cohort of ECB-watching journalists?

If Trichet was so confident that a decision to raise rates would be forthcoming in August, why could the decision not have been taken at the July meeting or announced after a teleconference in August? Could it really not have waited until the following meeting, scheduled for August 31?

The answer is perhaps to be found in a continuing debate in the governing council between those in favour of proceeding cautiously, in 25 basis point steps, and those who favour a more pre-emptive approach, raising rates more rapidly and/or in 50bp steps.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree