The European Central Bank (ECB) on Thursday raised its interest rates in a move that was broadly expected, while the Bank of England (BoE) left its own rates unchanged, a policy that also was anticipated.
The ECB has not, however, softened its stance on accepting Greek debt as collateral in the event of a default, which is viewed as a means of keeping governments from a downgrade to a default and avoiding the contagion that would follow.
Reuters reported that the increase to 1.5% in the main refinancing rate had been considered a logical result of the ECB's repeated "strong vigilance" message—words that are regarded as code for a coming rate rise. Later in the day, the news service reported that ECB President Jean-Claude Trichet signaled that further rate hikes are likely.