Two sources said ECB policymakers expect to hold rates at the July 22 meeting if
energy prices remain near current levels. The bank on Thursday delivered its
first rate rise in nearly three years to curb inflation from fuel-cost increases
linked to the Iran-related conflict. The sources said a July pause is currently
more likely than another hike, unless energy prices jump sharply — one source
said only a large oil rebound, with Brent above $100/bbl, would trigger a July
hike. The other added an unexpected further rise in core inflation could change
market expectations. Both noted ECB staff projections already assume two further
rate hikes, so a July pause would not preclude additional tightening later,
possibly in September.
