European Central Bank, Bank of England hold rates steady
The European Central Bank and Bank of England, despite growing unease about inflation and slowing economic indicators, kept their benchmark interest rates unchanged Thursday. But ECB president Jean-Claude Trichet told a news conference that the European bank is ready to act "pre-emptively" to counter inflation in the 15-country euro zone, which is home to 318 million residents and accounts for more than 15 per cent of the world's gross domestic product. Trichet, speaking to reporters after the bank decided to keep its benchmark refinancing rate unchanged at four per cent, said the ECB "remains prepared to act preemptively so that second-round and upside risks to price stability" do not materialize. That is blunt language warning that should the bank deem it necessary, it is ready to lift its key interest rate.
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