ECB Keeps Interest Rate at 1%

As expected – the ECB did not announce any change to interest rates today. The 1% interest rate has been in place since May 2009 (See ECB Rate History Here).
Financial problems in Greece, Portugal and Spain and here in Ireland are slowing the overall Eurozone recovery. When the ECB met in January, they were cautiously optimistic and there were no reasons why they should change their stance at this time. Given uneven growth and low inflation, Trichet said last month that the current level of interest rates is still “appropriate” and that quarterly GDP will be up and down.

Earlier today the Bank of England kept interest rates at 0.5% and also announced that it was putting its 11-month, £200bn programme of asset purchases, known as quantitative easing, on hold.  The BOE monetary policy committee  said that while the UK economy was likely to continue its gradual recovery, they were  concerned that credit conditions in the economy were likely to remain “restrictive”.