Economists say future rate hikes are expected from the ECB, but future action by the BoE is more uncertain.

At today’s meeting, which was held in the form of a teleconference, the Governing Council of the ECB decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4%, 5% and 3%, respectively.

Similarly, the Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 5.75%.

CIBC World Markets confirms that the Bank of England’s non-move was widely expected. And, as rates were left unchanged, it didn’t issue an accompanying statement.

“It is clear that there is varying opinion among MPC members at present, with some of those who voted for a rate hike in July unsure of the need for further monetary tightening, along with some in the unchanged camp outlining the risks of a sharper than expected slowdown in the consumer sector – especially as past hikes feed through,” CIBC comments.

“The tightening psychology may persist among the hawks at the BoE, but the mixed views on the Committee mean that future interest rate decisions might not be taken quite so easily as in the past, with varied discussions likely in the coming months,” it adds. “Whether or not the Bank sees the need for another interest rate hike in the current cycle remains to be seen; and, even if we believe the need for further monetary policy tightening remains highly debatable, the markets may still believe in the 6% peak scenario for a while longer.”

Conversely, CIBC says that the ECB’s post-meeting press conference provided a clear hint on interest rates, with president Jean-Claude Trichet signaling the potential for a September rate hike.

“It is clear that the tightening bias at the ECB remains in place and the central bank may have wanted to give the markets fresh clues on the near-term monetary policy outlook – after the CPI report came in on the softer side of expectations and as the debate over a September or October rate hike continued,” it says.

“On the recent stock market volatility Trichet said that there has been a period of nervousness where we see volatility in the markets in general, adding that there has been a re-pricing of risk (or as he also said, a re-appreciation of risk). He also called for investors to be as keen as possible to avoid a sharp and abrupt correction,” CIBC reports.

“The calling of a press conference where the term ‘strong vigilance’ was endorsed clearly hints at the potential for a September rate hike. There was nothing surprising from Trichet’s comments today and we stick to our view that the ECB wants to deliver another interest rate sooner rather than later,” it concludes.