With the ECB having moved to address stresses in euro area funding markets, the question iswhether they will also adjust their monetary stance. Thus far, they are still viewing their policystance as accommodative and the risks to price stability on the upside. The only sign of the ECB’sstance softening is that the Bank sees downside risks to its growth outlook intensifying. That said,it still sees the risks as being broadly balanced overall, admitting heightened uncertainty. Asbefore, the Bank monitors upside risks to price stability very closely. Given the ECB’s separationprinciple between its interest rate decisions and its monetary policy operations, it thus seems tous that the ECB could be raising rates again in the fall.
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