At next week’s monetary policy meeting, the Governing Council will stress that it will ensure banks have ample liquidity and that financial stability will be preserved while implementing EU sanctions against Russia. But its key message will be that it will tread carefully in exiting its accommodative policy and could even step up support if needed. Partly with that in mind, we are pushing back the first rate hike in our profile to December this year. That said, the Bank will also say it will revert to its previous plans when the conflict-related risks have faded.
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