European Central Bank Statement comparison — 14 September 2023 vs 14 December 2023
This European Central Bank statement comparison covers 14 September 2023 and 14 December 2023. Overall, the newer document was more hawkish. The ECB held rates steady but delivered a hawkish shift via stronger forward guidance on duration and the introduction of balance sheet normalisation. The next decision will likely maintain a restrictive stance, with rate cuts deferred until inflation is sustainably on track toward 2%.
What changed
More hawkish. The ECB held rates steady but delivered a hawkish shift via stronger forward guidance on duration and the introduction of balance sheet normalisation. The next decision will likely maintain a restrictive stance, with rate cuts deferred until inflation is sustainably on track toward 2%.
- Inflation — More dovish. New inflation projections show a return to below 2% in 2026, a dovish shift, though near-term domestic price pressures remain elevated.
- Labour Market — Little changed. No material labour market language in either document, so stance unchanged.
- Rate Path — More hawkish. Rate hold is less hawkish than prior hike, but forward guidance was strengthened with 'sufficiently restrictive for as long as necessary' and balance sheet normalisation adds tightening.
- Balance Sheet — More hawkish. Prior document had no balance sheet language; current announces PEPP unwinding, a hawkish addition.
Key wording
Inflation continues to decline but is still expected to remain too high for too long.
the Governing Council today decided to raise the three key ECB interest rates by 25 basis points.
The September ECB staff macroeconomic projections for the euro area see average inflation at 5.6% in 2023, 3.2% in 2024 and 2.1% in 2025. This is an upward revision for 2023 and 2024 and a downward revision for 2025.
Underlying price pressures remain high, even though most indicators have started to ease.
With the increasing impact of this tightening on domestic demand and the weakening international trade environment, ECB staff have lowered their economic growth projections significantly.
Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target.
Overall, staff expect headline inflation to average 5.4% in 2023, 2.7% in 2024, 2.1% in 2025 and 1.9% in 2026.
The Governing Council today decided to keep the three key ECB interest rates unchanged.
Underlying inflation has eased further. But domestic price pressures remain elevated, primarily owing to strong growth in unit labour costs.
Eurosystem staff expect economic growth to remain subdued in the near term.
Based on its current assessment, the Governing Council considers that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal.
Official documents
Background reading
Related
14 September 2023 statement · 14 December 2023 statement · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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