ECB leave interest rates on hold at 4.00%
8 May 2008
The ECB today conformed to market expectations and left interest rates unchanged at 4.00% for an eleventh consecutive month.
While the latest Eurozone inflation readings showed April CPI moderating to 3.3%y/y down from 3.6% in March, risk remains to the topside in the months ahead. Earlier this week, soaring energy costs fuelled a steep 5.7%y/y increase in Eurozone producer prices for March, in yet another sign of persistent price pressures. The fact remains that inflation is likely to remain above 3.0% until the final quarter of the year and unless Eurozone growth deteriorates markedly, the ECB are unlikely to deviate from their core remit of ensuring price stability.
The focus now shifts to the accompanying news conference at 1.30pm where the market will be looking to gauge any insight to the committee’s thinking going forward.