The accounts of the European Central Bank's (ECB) July policy meeting revealed on Thursday that there was broad agreement on the assessment that there are signs of a possible downward surprise in economic activity.

Key takeaways

"Members concurred with Mr Lane that the near-term economic outlook for the euro area had deteriorated."

"It was argued that the deterioration in the outlook showed that monetary transmission was working."

"There had been no material surprise in the latest inflation outcomes compared with the June projections."

"The risk of second-round effects leading to wage-price spirals seemed to be contained."

"the Governing Council needed clearer signs of whether inflation would converge to target once the effects of recent shocks had faded."

"Underlying inflation could be expected to remain high for an extended period."

"A further rate hike in September would be necessary if there was no convincing evidence that the effect of the cumulative tightening was strong enough."

Market reaction

The Euro remains under constant selling pressure following this publication. As of writing, EUR/USD was down 0.6% on the day at 1.0858.