ECB governors eye July pause after first hike, sources says

FRANKFURT, June 11 (Reuters) - ‌European Central ​Bank ​policymakers see keeping interest rates on hold at their next meeting in July as ‌the more likely scenario, if energy prices stayed ⁠near their current level, two sources told Reuters.

The ECB raised ‌interest rates for the ‌first time in nearly three years on Thursday in the hope of curbing inflation before a ​surge in fuel costs triggered by the Iran war spreads more broadly across the euro zone ⁠economy.

Two sources at the meeting said a pause at the ECB's following ​gathering on July 22 was more likely than a hike for now, provided there ​was no sudden and large ‌swing in energy prices.

One source said it would take a new surge in ⁠oil prices -- to more than $100 a barrel for Brent crude -- to trigger a rate rise in July, given that ⁠second-round effects on the price of other goods and services ​were absent so far.

A second source said that another unexpected jump in core inflation could also trigger a move.

However, both ‌sources noted that ECB projections embedded two more rate hikes, so even if ‌policymakers paused in July, they could still act later, ⁠possibly in September, ‌without a material improvement ​in the inflation profile.

An ECB spokesperson declined to comment.

(Reporting by Francesco Canepa and Balazs ‌Koranyi)

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