The European Central Bank has again kept interest rates unchanged at 1.5 per cent for the third month in a row.
ECB president Jean-Claude Trichet said “We expect the euro area economy to grow moderately, subject to particularly high uncertainty and intensified downside risks”
“Inflation should fall below 2 per cent in 2012, MrTrichet said, and price risks were “broadly balanced”.
The change in the ECB’s inflation view suggests it has abandoned its policy tightening course and that interest rates are now on hold.
Earlier this month some “experts” were talking about rate cuts as early as Dec 2011 because of concern about faltering growth
The euro fell today by the most in a month versus the dollar because of he lower chance of future interest-rate increases.
In the UK – the Bank of England maintained rates at the all time low of 0.5%