ECB keeps tightening expectations aloft
The European Central Bank left rates unchanged as expected this morning, but the accompanying communications helped investors calibrate policy expectations for the year ahead. The statement itself was fairly anodyne. Officials reiterated that they were not committed to any particular rate path and would continue to take a data-dependent, meeting-by-meeting approach. They acknowledged that a larger and longer-lasting energy shock, together with its indirect and second-round effects, was likely to push inflation higher and growth lower. But they also said that “underlying inflation has remained broadly stable so far and wages do not show a material response at this stage”,...