ECB Policymakers Tilt Inflation Risks to Upside Despite Rate Hike Pause

The European Central Bank's (ECB) policymakers have concluded that the risks to inflation are tilted to the upside, according to their July monetary policy meeting accounts.

Inflation expectations remained well anchored for the medium-term, but high short-term inflation expectations persisted since the outbreak of the war.

The longer energy prices stayed high, the more likely they were to drive up broader inflation through indirect and second-round effects, ECB policymakers noted.