ECB stands pat, but says June projections may justify cuts

(Sharecast News) - Rate-setters in Frankfurt stood pat on rates on Thursday, but said that it would be correct to lower interest rates if its next set of projections, in June, increased their confidence that inflation was headed lower. The policy statement also stated that the GC would take decisions on a meeting by meeting basis and that rates were not a pre-set path.

For her part, ECB boss Christine Lagarde dedicated a substantial part of her introductory remarks to the possible impact on growth and prices of geopolitical events.

Also in the statement, the European Central Bank's Governing Council said that the latest information available "broadly" confirmed its prior medium-term inflation outlook.

Most gauges of underlying inflation were "easing" and wage increases "gradually moderating", it added.

As well, companies were absorbing part of the higher labour costs via their profits.

Yet domestic inflation was "strong" and was keeping services price inflation "high".



The ECB kept its interest rate on the main refinancing operations, the marginal lending facility and the deposit facility at 4.50%, 4.75% and 4.00%, respectively, all as expected.

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