Biting the bullet

5 May 2014 By Swaha Pattanaik Follow @swahapattanaik

The central bank last eased policy half a year ago. It can always find excuses to prevaricate longer. The euro rally has paused, rises in short-term market rates have yet to lift longer ones, inflation is inching up. But the economy needs help, and the quicker the better.

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Euro zone consumer prices rose 0.7 percent in April compared with a year earlier. While that marked a rebound from March’s 0.5 percent, it remains less than half the European Central Bank’s target of keeping inflation close to but below 2 percent.

The European Central Bank’s next policy meeting is on May 8. It has kept policy unchanged since Nov. 7, 2013, when it cut its key interest rate by a quarter of a percentage rate to 0.25 percent.

Lending to euro zone households and companies fell by 2.2 percent in March compared with a year earlier and money supply growth slowed, according to ECB data released on April 29.

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