The European Central Bank (ECB) left its benchmark interest rate
unchanged at 4 percent on Thursday despite growing pressure for a
rate cut.
European Central Bank (ECB)
President Jean-Claude Trichet speaks to the European Parliament's
monetary affairs committee in Brussels Jan. 23, 2008.
Economists said the decision made by the 21-member governing
council of the ECB signaled that the overriding concern of the bank
is curbing inflation rather than supporting a weakening
economy.
"This decision reflects our assessment that risks to price
stability over the medium term are on the upside, in a context of
very vigorous money and credit growth," ECB President Jean-Claude
Trichet told a press conference after the council meeting.
"Looking ahead, while the slowdown in the economies of some of
the euro area's major trading partners is likely to have an impact
on euro area real GDP growth in 2008, both domestic and foreign
demand are expected to support ongoing growth," he added.
The ECB is under growing pressure to cut rates as signs of
slowing global growth continue to emerge.
Amid concern that the U.S. economy is sliding into a recession,
the U.S. Federal Reserve last month cut interest rates at the
fastest pace since 1990, to 3 percent.
Adding to the pressure on the ECB, the Bank of England on
Thursday lowered its benchmark rate by a quarter point to 5.25
percent, its second cut in three months.
Some analysts are expecting the ECB to cut rates by the middle
of this year.
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(Xinhua News Agency February 8, 2008)
