European Central Bank officials agreed they should raise borrowing costs again if needed despite deciding against such a move in October, according to an account of their last policy meeting.

“Even if interest rates were left unchanged at the current meeting, the view was held that the Governing Council should be ready, on the basis of an ongoing assessment, for further interest-rate hikes if necessary, even if this was not part of the current baseline scenario,” the account of the Oct. 25-26 gathering published Thursday showed.

The ECB left interest rates on hold last month for the first time since embarking on an aggressive rate-hiking cycle in mid-2022. The economy is now treading water and a recession is possible after output shrank 0.1% in the third quarter.

Here’s what the account revealed on key topics:

Interest Rates

• “It was stressed that the Governing Council had to be both persistent and vigilant. Persistence was seen as essential to bring inflation back to 2% in the medium term”
• “Vigilance implied that, while the Governing Council had to assert the effectiveness of its measures and to acknowledge the progress that had been made, overconfidence and complacency had to be avoided in view of possible new challenges that could lie ahead until inflation was brought back to target”
• “Members agreed that the focus of the current meeting was communication rather than action”

Inflation and Economy

• “Overall, the process of disinflation seemed to be proceeding largely as expected, reflecting not only diminishing effects from exogenous factors that had been pushing inflation up, but also the impact of monetary policy”
• “Headline inflation had evolved as projected, although growth had turned out to be weaker than expected, partly owing to a materialization of downside risks”
• “At the same time, comfort was drawn from the fact that forecast errors for inflation were close to zero and, if anything, the disinflation process was proceeding somewhat faster than expected”

Policy Transmission and Markets

• “Turning to the assessment of monetary policy transmission, members generally agreed that transmission was proceeding more strongly than had been anticipated in September”
• “Moreover, a significant part of the interest rate pass-through was still pending and likely to restrain activity and inflation over the projection horizon”
• “Since mid-July the euro had fallen by nearly 6% against the US dollar. This constituted a headwind to the Eurosystem’s efforts to reduce inflation in a timely manner”

Balance Sheet

• “There was broad agreement that continuity in PEPP reinvestments would be consistent with a decision to keep interest rates unchanged at the October meeting, while a discussion of an early termination of PEPP reinvestments at the current meeting was seen as premature”