The accounts of the European Central Bank's April policy meeting showed on Thursday that policymakers acknowledged that upside risks to inflation and downside risks to growth have intensified.

Key takeaways

"Weakness could persist well beyond the end of the conflict."

"There was little evidence that the increase in energy prices was generating second-round effects."

"On the consumer side too, it was still too early for second-round effects to be visible, since for this wage negotiations needed to take place."

"Current situation of a classical negative supply shock was different from the situation in 2022."

"It was now evident that the energy price shock was not only large, but also becoming more persistent, raising the risk of it feeding through into broader inflation dynamics."

"By June, more information on the impact of the energy shock would be available."

"A number of members would not have opposed raising rates."

"Increasingly unlikely that a looking through approach without any monetary policy action would be appropriate."

"A number of members noted that the decision was a close call."

"It was argued risks of unanchoring had re-emerged."

"The view was broadly shared that there was no evidence yet of strong second-round effects."

"If a conclusive agreement was reached to end the war, one could not quick reversal in the risks to inflation."

Market reaction

EUR/USD showed no immediate reaction to the ECB Accounts and was last seen trading slightly above 1.1600, losing 0.12% on the day.