ECB review: Back to the baseline

The ECB kept policy rates unchanged at the July meeting, with the deposit rate at 2.25%, in line with consensus and market pricing.
Lagarde kept full optionality on the future policy rate path, without precommitting. There was no market reaction to the meeting.
We expect a final 25bp hike in September, bringing the deposit rate to 2.50%.

Danske Research Team Danske Bank A/S

The ECB decided to keep its three key policy rates unchanged at the July meeting, as expected, with the deposit rate at 2.25%. Lagarde said that the economic outlook was back to the baseline from the June meeting, following recent developments in energy prices. The risk assessment is also back to where it was in June, compared with the Sintra conference, where she said that risks were “more balanced”.

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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