Inflation to stay high for a while: ECB
ECB President has said inflation will remain high for some time, signaling that the bank is in no rush to lower interest rates as economic growth slows.
By Bloomberg |
FRANKFURT: European Central Bank (ECB) president Jean-Claude Trichet said inflation will remain ���high��� for some time, signaling that the bank is in no rush to lower interest rates as economic growth slows.
���Inflation rates have risen significantly since autumn,��� Mr Trichet said at a press conference in Athens after the ECB kept its key rate at 4%. ���As we have said, inflation rates are expected to remain high for a rather protracted period of time before gradually declining again. ��� The ECB is reluctant to follow the US Federal Reserve in cutting borrowing costs.
���The level of uncertainty resulting from the turmoil remains unusually high,��� even though ���the economic fundamentals of the euro area are sound, ��� Mr Trichet said.
The Bank of England also kept its benchmark rate unchanged. The euro rose to as high as $1.5417 after Trichet started speaking from $1.5313.
The ECB, which aims to keep inflation just below 2%, has left rates unchanged since June last year. Mr Trichet said the current interest-rate level ���will contribute��� to bringing inflation back to the ECB���s comfort zone. At the same time, inflation is ���likely to remain significantly above 2% in the coming months, moderating only gradually over the course of 2008.���
���Inflation rates have risen significantly since autumn,��� Mr Trichet said at a press conference in Athens after the ECB kept its key rate at 4%. ���As we have said, inflation rates are expected to remain high for a rather protracted period of time before gradually declining again. ��� The ECB is reluctant to follow the US Federal Reserve in cutting borrowing costs.
���The level of uncertainty resulting from the turmoil remains unusually high,��� even though ���the economic fundamentals of the euro area are sound, ��� Mr Trichet said.
The Bank of England also kept its benchmark rate unchanged. The euro rose to as high as $1.5417 after Trichet started speaking from $1.5313.
The ECB, which aims to keep inflation just below 2%, has left rates unchanged since June last year. Mr Trichet said the current interest-rate level ���will contribute��� to bringing inflation back to the ECB���s comfort zone. At the same time, inflation is ���likely to remain significantly above 2% in the coming months, moderating only gradually over the course of 2008.���
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