European Central Bank policymakers were divided last month on how to deal with soaring inflation, with some hoping to raise interest rates this summer, sparking even more heated debate when they meet again next week.

Some ECB rate-setters pushed for a “firm end date” for their net bond purchases, laying the groundwork for a third-quarter rate hike, warning the bank would risk inflation “behind the curve” otherwise. summary Council meeting in March.

But others advocate a “wait and see” stance amid uncertainty over the economic impact of Russia’s invasion of Ukraine on the euro zone. They worry that the war could “lead to a technical recession,” or two consecutive quarters of negative growth.

The ECB decides to adopt a “balanced compromise” to scale back its bond purchases more quickly and end them in the third quarter Barring a sharp downturn, while delaying a decision on possible rate hikes.

Minutes show ECB policymakers are shifting, analysts say A more “hawkish” direction In favor of a quicker withdrawal of its monetary stimulus. “The hawks have the upper hand,” said Frederik Ducrozet, strategist at Pictet Wealth Management.

Since last month’s meeting, annual inflation has reached A new record of 7.5% in the euro area. March data is likely to reinforce hawkish calls for the central bank to end nearly eight years of bond purchases and negative interest rates.

Investors expect the ECB to raise interest rates by 0.6 percentage points by the end of the year, which will bring its main deposit rate back into positive territory for the first time since 2014, above its current record low of minus 0.5 percent. point.

Several ECB policymakers said they expected the central bank to raise interest rates this year, with some, including Klaas Knot in the Netherlands and Pierre Wunsch in Belgium, suggesting two hikes could be expected this year.

Policymakers have been wrangling ahead of next week’s meeting. Bundesbank President Joachim Nagel said the spike in inflation “worries us all” and predicted that “savers may soon be able to expect higher interest rates again”.

But ECB executive board member Fabio Panetta said the euro zone was most under pressure on prices from the energy market As well as other factors beyond the control of the central bank, “domestic demand must be suppressed on a large scale to reduce inflation”.

Panetta warned that tightening monetary policy prematurely “would mean substantially lower real activity and employment, lower wages and incomes,” reflecting the views of more dovish council members.

While some policymakers questioned the “puzzling” reliability of the ECB’s forecast of inflation falling below 2% in 2024, others said that “bold moves are even more unreasonable in the new environment brought on by the war. could further erode confidence,” according to the minutes.

European Central Bank President Christine Lagarde, tweet She tested positive for Covid-19 on Thursday, adding that she had “fairly mild” symptoms and would be working from her home in Frankfurt until she fully recovered. If Lagarde still tests positive next week, she is expected to attend council meetings and press conferences via video link.