Overview

• The Governing Council kept the key rate at 2% on July 23–24, with the next meeting expected to hold steady before autumn discussions on further cuts, according to Reuters sources, while recent data show growth holding up and inflation near 2%.
• Several members judged inflation risks to be tilted to the downside versus June staff projections, and one policymaker argued an additional cut was warranted in July due to rising risks to output and prices.
• A few officials took the opposite view, citing resilient activity, persistent services inflation and possible supply strains from tariffs, and warned projections may understate inflation from global fiscal expansion.
• The accounts note U.S. tariffs near 15% on EU goods align with ECB assumptions, which helped avert the most pessimistic scenarios, though trade policy keeps the outlook uncertain.
• Policymakers described the euro’s appreciation since spring as structural and unlikely to reverse soon, with some expecting only limited pass-through to consumer prices.