FXstreet.com (Barcelona) – Jean Claude Trichet has defended that economic data over the last month has underpins July’s rate hike, while he warns about upside risks to price stability over the medium term, in the first press conference after the release of the bank’s decision to keep interest rates on hold at 4.25%.Trichet has repeated that the current inflation rates are worrying , while upside risks to price stability over the medium term have increased, the ECB’s chairman foresees consumer inflation to remain at the current levels during a longer time than previously thought, to ease gradually in 2009.
The European Central Bank will, according to Trichet, continue monitoring very closely all developments in order to keep CPI expectations anchored, while he stressed the need for companies as well as for households to change their behaviour. Trichet has affirmed the commitment to monitor wage devts with “particular attention”.
The ECB president has affirmed that the Euro Zone’s economic fundamentals remain “sound”, nevertheless, he warned that GDP will grow in the mid 2008 at a slower pace than in the first quarter, and the situation is not likely to change substantially in the third quarter.
No comments:
Post a Comment