Brussels, 01/12/2004 (Agence Europe) - On Tuesday the president of the European Central Bank recognised at the parliamentary economic and monetary affairs committee that growth in 2005 would be slower than forecast (EUROPE yesterday p 11). New forecasts from his services will be published on Thursday and given the effect of more moderate growth in the second half of 2004, the 2.3% figure for 2005 growth could be revised downwards. Jean-Claude Trichet also highlighted the vigilance that the ECB would deploy when dealing with the risks on price stability, notably higher oil prices or wages. He did, however, added that the materialisation of these risks had not happened and did not justify a change in monetary policy.
With an annual inflation rate that had fallen to 2.2% in November, after standing at 2.4% in October, everything appears to suggest that the board of governors meeting on Thursday would keep interest rates unchanged. On Tuesday, the euro reached record levels compared to the dollar and Trichet produced his almost ritual response, "recent movement on the current markets are unwelcome". He also reaffirmed his confidence that the USA would reduce their budget deficit.