(Bloomberg) -- “A few” European Central Bank officials favored a smaller increase in interest rates in October to tackle record inflation, an account of their last meeting showed.

Those who preferred a less aggressive step cited the fact that the hike was accompanied by other monetary-tightening measures including a change in the remuneration of minimum reserves, and the adjustment of the terms of cheap financing for banks, according to the account, published Thursday.

“A few members expressed a preference for increasing the key ECB interest rates by 50 basis points,” the ECB said. The “proposal to raise the key ECB interest rates by 75 basis points was supported by a very large majority of members.”

After back-to-back increases of 75 basis points to stem the quickest price gains since the euro was introduced, investors are wondering whether the ECB will ease off when it next sets monetary policy in mid-December.

There are reasons for caution: a recession is growing ever likelier in the 19-nation euro zone and Russia’s war in Ukraine is maintaining huge levels of uncertainty. But unprecedented inflation -- at more than five times the 2% target -- is the main focus. November data due next week are likely to steer policy makers in the coming weeks.

The ECB’s full account can be found here. Below are extracts on some of the key policy areas.

  • On monetary policy
    • “A 75 basis point increase was judged to be an appropriate response in view of the protracted period of excessively high inflation and the risk that this might add to medium-term price pressures”
    • “It was recalled that the monetary-policy stance was still accommodative and argued that a 75 basis point increase constituted a necessary step toward a more neutral level. It would also amount to a further front-loading of interest rate increases, allowing a neutral level to be reached swiftly”
  • On the economy
    • Chief Economist Philip Lane said: “For the next two quarters, the current assessment pointed to a drop in economic activity. However, this was very different from a scenario in which the euro area entered a prolonged period of negative growth.”
    • “It was also very different from the downside scenario described in the September 2022 ECB staff macroeconomic projections, as energy prices were currently much lower than had been assumed in the downside scenario”
    • “Moreover, the assumption of energy rationing leading to sizeable production cuts had not materialized, nor had there been a major increase in financial stress”
  • On the ECB’s balance sheet
    • “It was underlined that the Eurosystem’s large bond portfolios were continuing to provide further significant monetary policy accommodation by compressing term premia. Allowing the downward pressure on term premia to decline would facilitate more efficient setting of monetary policy, thereby helping to contain inflation”
    • “In this respect, it was seen as necessary, following an assessment of the repayments resulting from the adjustment of TLTRO III and their impact on financial conditions, to discuss the reinvestment strategy for the APP portfolio at the Governing Council’s December monetary-policy meeting”
  • On inflation
    • “Lane stressed that inflation remained far too high and would stay above the ECB’s target of 2% for an extended period”
    • “At the same time, there were no clear signs of widespread second-round effects, and longer-term inflation expectations remained broadly aligned with the 2% target”
    • “Members underlined that the latest inflation outcomes were not at all reassuring. Data continued to come in above expectations”
    • “Concerns were expressed especially with regard to core inflation and the broader array of measures of underlying inflation, which appeared to be gradually increasing further and -- with few exceptions -- did not point to the stabilization that had been hoped for and that had been embedded in the September staff projections”

--With assistance from Bastian Benrath.

(Updates with quotes from account.)

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