Single-mindedness

8 September 2011 By Pierre Briançon

The central bank signalled an end to interest rate increases, and acknowledged a global slump is now a higher risk than inflation. President Jean-Claude Trichet sees the ECB as an “anchor” in financially troubled times. But there’s a fine line between stability and immobility.

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The European Central Bank decided on Sept. 8 to keep its key interest rates unchanged, signalling that its rate rise cycle had been halted on concerns that an economic slowdown was a higher risk than rising inflation.

According to ECB staff forecasts, inflation could fall below 2 percent in 2012, after reaching 2.5-2.7 percent this year.

Growth forecasts were cut to a range of 1.4-to-1.8 percent in 2011 and 0.4-to-2.2 percent next year.

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