European Central Bank Statement comparison — 15 December 2022 vs 2 February 2023
This European Central Bank statement comparison covers 15 December 2022 and 2 February 2023. Overall, the newer document was more hawkish. The February statement reinforces the hawkish stance with a pre-commitment to a 50bp hike in March, while omitting explicit inflation or balance sheet updates, signalling a continued tightening path. The next decision is likely a 50bp hike as telegraphed.
What changed
More hawkish. The February statement reinforces the hawkish stance with a pre-commitment to a 50bp hike in March, while omitting explicit inflation or balance sheet updates, signalling a continued tightening path. The next decision is likely a 50bp hike as telegraphed.
- Inflation — Little changed. No new inflation assessment in current key passages; prior hawkish inflation language is not updated.
- Labour Market — Little changed. No labour market passages in either document.
- Rate Path — More hawkish. Current document adds explicit pre-commitment to a 50bp hike in March, stronger than prior's 'expects to raise further'.
- Balance Sheet — Little changed. No balance sheet language in current key passages; prior APP reduction plan remains in place.
Key wording
The Governing Council today decided to raise the three key ECB interest rates by 50 basis points and, based on the substantial upward revision to the inflation outlook, expects to raise them further.
In particular, the Governing Council judges that interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target.
Keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations.
The Governing Council’s future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.
From the beginning of March 2023 onwards, the asset purchase programme (APP) portfolio will decline at a measured and predictable pace, as the Eurosystem will not reinvest all of the principal payments from maturing securities. The decline will amount to €15 billion per month on average until the end of the second quarter of 2023 and its subsequent pace will be determined over time.
According to Eurostat’s flash estimate, inflation was 10.0% in November, slightly lower than the 10.6% recorded in October. The decline resulted mainly from lower energy price inflation. Food price inflation and underlying price pressures across the economy have strengthened and will persist for some time.
the Governing Council today decided to raise the three key ECB interest rates by 50 basis points
it expects to raise them further
the Governing Council intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March
it will then evaluate the subsequent path of its monetary policy
guard against the risk of a persistent upward shift in inflation expectations
Official documents
Background reading
Related
15 December 2022 statement · 2 February 2023 statement · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
The Cadence Brief
The one number that moved central bank pricing — delivered each weekday morning.