FRANKFURT (MNI) – Monetary policy in the Eurozone is still
“accommodative” and risks to the medium-term outlook for prices remain
“on the upside,” the Governing Council of the European Central Bank said
Thursday after deciding to leave its key interest rates unchanged.
The Council will continue to “monitor very closely” developments
with respect to upside risks to price stability, ECB President
Jean-Claude Trichet told reporters after its meeting here.
The comments suggest that the central bank’s tightening bias
remains in place, but that a third rate this year is unlikely to be
decided at the next policy meeting in September.
This comes as little surprise, as analysts have scaled down the
probability of another hike before the end of the year in light of
slowing inflation, waning economic growth and the resurgence of tensions
on financial markets amid the risk contagion from Greece’s debt
problems. Forward markets are no longer pricing in another full rate
hike this year.
–London newsroom: 4420 7862 7492; email: ukeditorial@marketnews.com
[TOPICS: M$$EC$,MT$$$$,M$X$$$,MGX$$$,M$$CR$]
