Brussels, 05/08/2010 (Agence Europe) - It has come as no surprise that the European Central Bank (ECB) has decided not to change interest rates in the euro zone, given the continued economic recovery. During its meeting on Thursday 5 August, the Board of Governors of the bank decided that the interest rate for the main refinancing operations would remain 1% and the rates for the marginal lending facility and deposit facility would remain at 1.75% and 0.2 % respectively.
The president of the European Central Bank, Jean-Claude Trichet, informed the press that the rates were “appropriate” and that price development remained “moderate” in the medium term. Inflation reached 1.7% in July, as opposed to 1.4% in June and inflation rates are expected to prove more volatile, around the current rate, in the next few months.
The economy of the Eurozone is expected to grow at a “moderate and still uneven pace (depending on the country and the sector in question, Ed) in an environment of uncertainty”, explained the president of the ECB. At this stage, available data suggests a strengthening in economic activity in the second quarter of 2010 and illustrates that the third quarter will be better than expected, explained Mr Trichet. Nonetheless, even after this “very good” second quarter, together with the encouraging figures for the current quarter, hasty conclusions should be avoided, insisted Mr Trichet, who is sticking to the forecasts made by the ECB services in June (EUROPE 10157) and is arranging a meeting in September to discuss new forecasts.
Although the president appeared to be highlighting the moderate characteristics of the evolving picture (and emphasised that they should not be claiming victory yet), he did illustrate promising developments at a level of funding for the real economy and explained that they were not in a period of credit scarcity. (A.B.)