ECB leave interest rates unchanged at 1.00%
2nd July 2009
As widely expected, the European Central Bank kept Eurozone interest rates on hold today at 1.00%, amid faint signs of an economic recovery as it takes stock of its unconventional measures to tackle the Eurozone recession.
As far as the outlook for the Eurozone is concerned, the ECB noted that recent survey information suggested that following two quarters of very negative growth, the rate of economic activity over the remainder of 2009 is expected to decline at a slower pace. After a stabilisation phase, positive quarterly growth rates are expected by mid-2010.
Despite rising unemployment, tightening credit conditions and the risk of deflation, the latest economic data suggests the worst of the economic tempest may now have passed. However, other signals point to a frail recovery at best. Despite successfully pumping €442 billion into the Euro money markets last week, the latest figures suggest that institutions are hoarding much of that cash at present, rather than lending it out as hoped.