Capital Economics economist Jack Allen-Reynolds said the ECB's decision to hold
rates unchanged was unsurprising and the accompanying statement offered almost
no signal on the next policy move. He noted the commentary remained neutral
despite recent oil price rises and that energy prices are close to the ECB's
baseline assumption. Allen-Reynolds said if energy prices fall in the coming
months the ECB is likely to keep rates unchanged for the year; if energy prices
continue to rise another rate hike is likely. He added that if policymakers are
targeting a September increase, President Lagarde could hint at that in the
press conference.
