President of the ECB Jean Claude Trichet in his press conference after holding the interest rate unchanged at 1.00% in June said the economy started to rebound from spring with the improvement in weather conditions. He predicts economic growth to be at a moderate pace over the medium term as balance sheet adjustments and high unemployment will affect the progress seen recently. Trichet raised the euro-area growth forecast for 2010 to 1% from 0.8%, while in 2011 the ECB expects the euro area to expand 1.2%, lower than the previous estimates of 1.5% due to decline in consumer spending
With regard inflation, he confirmed that the current low interest rate is appropriate while the emergency measures are non-standard measures are consistent with the bank's mandate and "temporary in nature." price stability is predicted to remain maintained over the medium term, while inflation projections stay tightly anchored.
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