ECB withstands rate cut pressure

In spite of increased pressure, European Central Bank decides to leave interest rates unchanged

With its decision, the ECB rejected calls for a rate cut by several EU finance ministers and by the OECD and the International Monetary Fund. The European Central Bank acknowledges a slowdown of economic growth and an easing of inflation risks, but believes growth is still strong enough to leave interest rates on hold. It is to be expected that its controversial decision will intensify remarks by its critics that the ECB is not handling its monetary policy well.

 

In spite of increased pressure, the European Central Bank (ECB) decided to leave its interest rates at 4.75 per cent. Financial markets reacted negatively and pushed the euro further down.

 

Financial experts think that the ECB is now unlikely to cut rates at its next meeting on 26 April and could even hold off until as late as June.

 

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