All ECB policymakers agreed to leave rates unchanged at the July meeting, following the first rate hike since 2023 in June, citing elevated uncertainty and the fact that the full inflationary impact of the energy shock had yet to emerge, according to the latest minutes. However, some said they would not have opposed another hike, noting that the likelihood of further tightening becoming unnecessary remained low. Policymakers saw upside risks to inflation and downside risks to growth from geopolitical developments in the Middle East and the Russia-Ukraine war, while stressing that communication should remain clear to avoiding any pre-commitment to a September move. The minutes emphasized that the July pause should not be interpreted as the end of the tightening cycle, with another hike likely unless the inflation outlook improves significantly. At the same time, policymakers wanted to keep the September decision open, allowing room for the medium-term inflation outlook to improve.