FRANKFURT (Reuters) -European Central Bank policymakers are in no hurry to cut interest rates again, even if they are keenly aware of unusually high uncertainty and risks, the accounts of their September
10-11 meeting showed on Thursday.
The ECB left rates unchanged in September and even offered a modestly upbeat assessment of the euro zone economy, indicating that the bar for any further policy easing was high, even if U.S. tariffs still cloud the outlook.
"The current level of interest rates should be seen as sufficiently robust in managing shocks, in view of two-sided inflation risks and taking into account a broad range of possible scenarios," the accounts of the meeting showed.
The chance of further rate cuts declined even further in the weeks since the meeting on relatively benign data and comments from ECB President Christine Lagarde that the range of risk around the inflation outlook was narrowing.
Markets now perceive almost no chance of a rate cut this year after 2 percentage points of easing in the year to June, and see a one-in-three chance of one last move sometime in the first half of next year.
"The current situation was likely to change materially at some point, but it was currently difficult to know when and in which direction," the ECB said in Thursday's accounts. "There continued to be a high option value to waiting for more information."
Still, the door to further easing has not fully closed, given ample downside risks.
France is in turmoil, German industrial output is plunging and German exports to the U.S. are falling fast. Household savings keep going up, private consumption is weak and corporate profitability is shrinking.
(Reporting by Balazs Koranyi; editing by Mark Heinrich)
