The European Central Bank (ECB) declined to raise interest rates on Thursday, keeping them at 1% despite an inflation rate within the euro zone that has risen above 2.4%.
This is the third month in a row that the inflation rate has exceeded the ECB’s target rate of below 2%. Jean-Claude Trichet, president of the ECB, would have to change his tone to deliver a stern message on inflation. As previously reported by AdvisorOne, after a statement earlier in the year that sent markets scurrying for cover, Trichet had backed off. There was also an expectation that the ECB might begin to withdraw crisis support measures at its Thursday meeting.
Reuters reported that economists had expected the interest rate to stay the same at Thursday’s meeting. However, in a poll, it found that the median expectation was for rates to hold steady till the fourth quarter of 2011, despite financial market investors apparently believing that the change will come in the third quarter instead.