The accounts of the European Central Bank's (ECB) May policy meeting revealed on Thursday that a number of members initially expressed a preference for increasing the key interest rates by 50 basis points.

Key takeaways

"More decisive action was warranted to move rates into sufficiently restrictive territory to ensure a timely return of inflation to target."

"Most of these members indicated that they could accept the proposed rate increase of 25 basis points."

"The ECB's communication should, however, convey a clear directional bias."

"Almost all members supported the 25 basis point rate rise."

"There was a strong preference against returning to outright forward guidance."

"Members widely viewed financial markets as being able to digest a full portfolio run-off."

"Caution was also expressed against too fast a contraction in the Eurosystem balance sheet."

"There was now more solid evidence that monetary policy was being transmitted to financing and credit conditions."

"It was also argued that transmission could be weaker than usual."

"Emphasis was placed on the evidence that various measures of longer-term inflation expectations had edged up above 2%.