European Central Bank Statement comparison — 2 February 2023 vs 15 June 2023

This European Central Bank statement comparison covers 2 February 2023 and 15 June 2023. Overall, the newer document was more hawkish. The ECB delivered a smaller 25bp hike but initiated quantitative tightening, maintaining an overall hawkish stance. The data-dependent approach leaves open further rate increases, but the pace may moderate, with balance sheet reduction providing additional tightening.

What changed

More hawkish. The ECB delivered a smaller 25bp hike but initiated quantitative tightening, maintaining an overall hawkish stance. The data-dependent approach leaves open further rate increases, but the pace may moderate, with balance sheet reduction providing additional tightening.

Inflation — Little changed. Inflation remains described as too high, but with signs of softening; the stance is consistent with the prior document's inflation concern.
Labour Market — More hawkish. New explicit emphasis on a robust labour market slowing core inflation decline, adding a hawkish dimension absent in the prior document.
Rate Path — Little changed. Rate hike size reduced from 50bp to 25bp, and explicit pre-commitment to a March hike is replaced by a general commitment to sufficiently restrictive rates, balancing dovish and hawkish elements.
Balance Sheet — More hawkish. New announcement to discontinue reinvestments under the asset purchase programme starting July 2023 introduces quantitative tightening, a hawkish shift.

Key wording

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.

guard against the risk of a persistent upward shift in inflation expectations
rate path: Shows upside inflation risk is a key concern.

future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach
rate path: Reiteration of meeting-by-meeting approach.

15 June 2023

It therefore today decided to raise the three key ECB interest rates by 25 basis points.
rate path: Direct rate hike confirms tightening bias.

The Governing Council’s future decisions will ensure that the key ECB interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2% medium-term target and will be kept at those levels for as long as necessary.
rate path: Commits to sufficiently restrictive rates and a prolonged hold.

The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.
rate path: Leaves room for adjustment based on incoming data.

Tighter financing conditions are a key reason why inflation is projected to decline further towards target, as they are expected to increasingly dampen demand.
rate path: Transmission is working, supporting the disinflation outlook.

The Governing Council confirms that it will discontinue the reinvestments under the asset purchase programme as of July 2023.
rate path: QT accelerates, tightening liquidity further.

Inflation has been coming down but is projected to remain too high for too long.
inflation: Reiterates that inflation is still above target and persistent.

Official documents

Background reading

2 February 2023 statement · 15 June 2023 statement · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology