The accounts of the European Central Bank's (ECB) monetary policy meeting held on September 8-9 were published today at 15:30 (GMT+2).

In the minutes of the September meeting, in which the Bank maintained its policy interest rate at 0 percent in line with market expectations, but decided to purchase net assets at a lower rate than in the previous two quarters under the Pandemic Emergency Purchase Program (PEPP) of 1.85 trillion euros,in order to balance the negative impact of the pandemic on inflation and to support the persistence of inflation expectations in the new medium-term target, members decided as a result of an assessment that a coherent monetary policy stance is necessary.

In the account confirming that financial conditions are generally favorable, the members agreed that the increase in inflation will largely disappear in the medium term and is caused by temporary factors that will not call for a potential policy tightening. In addition, all members agreed to maintain favorable financial conditions with a somewhat improved medium-term outlook, which allowed reducing PEPP purchases.

As for the assessment of the inflation outlook, a significant improvement over the course of the year was acknowledged. It was also observed that the staff inflation projection had been revised up in the previous projection rounds, thereby breaking the trend of the earlier successive downward revisions and pointing to the emergence of upside risks. However, it was noted that the near-term increase in inflation was largely driven by temporary factors that would fade in the medium term and not call for policy tightening. According to the September ECB staff projections, inflation was not expected to persistently reach levels that fully offset the pandemic impact on the inflation path at the relevant medium-term horizon, and it remained well below the ECB’s new inflation target.

The Governing Council stressed its determination to act forcefully and persistently, in line with its revised monetary policy strategy, to anchor inflation expectations solidly at its two per cent target.Finally, it was underlined that the Governing Council would continue to purchase flexibly according to market conditions. If favourable financing conditions could be maintained with asset purchase flows that did not exhaust the envelope over the net purchase horizon of the PEPP, the envelope would not need to be used in full and, equally, the envelope could be recalibrated if required to maintain favourable financing conditions.