By Scott Kanowsky
Investing.com -- Officials at the European Central Bank were divided over whether to raise interest rates by 50 or 75 basis points in December, according to minutes from the ECB's policy meeting last month.
The minutes showed that "a large number" of members expressed a preference for a 75 basis-point increase, "as inflation was clearly expected to be too high for too long and prevailing market expectations and financial conditions were plainly inconsistent with a timely return to the ECB's 2% inflation target."
Concerns also arose that a rate rise of less than 75 basis points would "send the wrong message" to markets hopeful that data showing a recent slowdown in U.S. consumer price growth could be a harbinger of an easing in the ECB's aggressive policy stance.
The central bank eventually settled on hiking its deposit rate by 50 basis points, edging down slightly from three straight larger 75 basis-point increases rolled out earlier in 2022. Policymakers agreed as well that the December decision would be accompanied by language stressing the ECB's intention to continue raising borrowing costs "significantly" in order to bring inflation back down to its medium-term target.
Elsewhere on Thursday, ECB president Christine Lagarde told a panel at the World Economic Forum in Davos that the central bank must "stay the course" in its bid to cool red-hot inflation through interest rate rises, arguing that Eurozone prices remain "way too high."