Eurozone ‘on hold’ until september
The European Central Bank (ECB) has left interest rates unchanged at 4%...
High oil prices and an increase in the cost of food have buoyed inflation in the eurozone at a time when economic growth is seen slowing. The ECB has said inflation remains a problem, noting that December's annual rate of 3.1% was above its 2% target.
The ECB's rate-setters are believed to be particularly concerned about spiralling wage demands in countries such as
"After the ECB raised interest rates to a roughly neutral 4.0% in June, the strong euro and the lingering turmoil in money and credit markets will likely keep the central bank on hold until September 2008," said Holger Schmieding at Bank of America