June 6th – The European Central Bank has kept their interest rate unchanged at 1% today.
The decision was widely expected, although some economists had forecast a quarter percentage point interest rate cut.
Mario Draghi, ECB president, warned last week that the bank could not “fill the vacuum” created by politicians’ inactivity.
The ECB rate has never gone below 1%. Recent Eurozone news showing inflationary pressures reducing and economic activity weakening could have justified an interest rate cut, the ECB council apparently decided to hold fire – at least for this month.