European Central Bank Statement comparison — 8 September 2022 vs 2 February 2023

This European Central Bank statement comparison covers 8 September 2022 and 2 February 2023. Overall, the newer document was more hawkish. The ECB continues its tightening cycle but at a slightly reduced pace (75bp to 50bp), while providing more explicit forward guidance on the next hike. The omission of growth concerns suggests the Council is more confident in the inflation fight, pointing to the promised 50bp hike in March with a data-dependent path thereafter.

What changed

More hawkish. The ECB continues its tightening cycle but at a slightly reduced pace (75bp to 50bp), while providing more explicit forward guidance on the next hike. The omission of growth concerns suggests the Council is more confident in the inflation fight, pointing to the promised 50bp hike in March with a data-dependent path thereafter.

Inflation — Little changed. Inflation remains elevated and above target; the current statement reiterates the need to guard against a persistent upward shift in inflation expectations, consistent with prior concern.
Labour Market — More hawkish. The current statement omits the prior acknowledgement of a substantial growth slowdown and stagnation risk, removing a dovish counterweight to the tightening stance.
Rate Path — More hawkish. The forward guidance is strengthened with an explicit pre-commitment to a 50bp hike in March, while the immediate rate hike is reduced from 75bp to 50bp, maintaining an overall hawkish posture.
Balance Sheet — Little changed. No balance sheet related passages in either document, indicating no shift in stance.

Key wording

8 September 2022

The Governing Council today decided to raise the three key ECB interest rates by 75 basis points.
rate path: Largest single hike in ECB history, frontloading normalization.

This major step frontloads the transition from the prevailing highly accommodative level of policy rates towards levels that will ensure the timely return of inflation to the ECB’s 2% medium-term target.
rate path: Emphasizes urgency to bring inflation back to target.

Based on its current assessment, over the next several meetings the Governing Council expects to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations.
rate path: Explicit commitment to further rate hikes in coming meetings.

The Governing Council’s future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.
rate path: Retains flexibility despite the hawkish signal.

According to Eurostat’s flash estimate, inflation reached 9.1% in August.
inflation: Inflation far above target, justifying aggressive action.

inflation is now expected to average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024.
inflation: Inflation projected above 2% even in 2024, warranting continued tightening.

2 February 2023

the Governing Council today decided to raise the three key ECB interest rates by 50 basis points
rate path: Rate hike confirms tightening stance.

it expects to raise them further
rate path: Signal of more tightening ahead.

the Governing Council intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March
rate path: Explicit pre-commitment to March hike.

it will then evaluate the subsequent path of its monetary policy
rate path: Opens door for data-dependent decisions after March.

Official documents

Background reading

8 September 2022 statement · 2 February 2023 statement · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology