By David Barwick – FRANKFURT (Econostream) – The European Central Bank’s June rate hike was warranted by a persistent energy shock and should “not be seen as an insurance hike,” but policymakers avoided signaling whether further tightening would follow, according to the account of the meeting, released Thursday.

“All members supported” Chief Economist Philip Lane’s proposal to raise its three key interest rates by 25bp on June 11, taking the deposit facility rate to 2.25%, the account of the June 10-11 meeting said.

Higher inflation from the persistent energy price shock was no longer merely a forecast, but had “already materialized,” with incoming data also showing increasingly visible and broad-based indirect effects on non-energy inflation, according to the account.

Further indirect effects were in the pipeline and second-round effects remained “a clear possibility,” the account said.

“Overall, it was now clear that the current situation no longer qualified as a case for looking through the shock,” the account said.

The option value of waiting for more information had “diminished considerably” since the previous meeting, it said.

The ECB said the decision was robust across a range of scenarios and that, in all scenarios, inflation would exceed target over the medium term without tighter monetary policy.

Even under a milder scenario with less elevated energy prices, maintaining the deposit facility rate at 2% in June would not have been appropriate, the account said.

At the same time, the account said the Governing Council should avoid pre-committing to any particular rate path.

Communication should remain neutral, “neither suggesting that the current decision was the first of a sequence of hikes to come nor that it was a one-off move,” it said.

The ECB said future decisions would remain data-dependent and meeting-by-meeting, based on the inflation outlook, incoming data, underlying inflation and the strength of monetary policy transmission.