The European Central Bank left its benchmark interest rate unchanged at 4% despite growing pressure for a rate cut.Economists said the decision made by the 21-member governing council of the ECB signaled that the overriding concern of the bank is curbing inflation rather than supporting a weakening economy.
“This decision reflects our assessment that risks to price stability over the medium term are on the upside, in a context of very vigorous money and credit growth,” ECB President Jean-Claude Trichet told a press conference after the council meeting.
“Looking ahead, while the slowdown in the economies of some of the euro area's major trading partners is likely to have an impact on euro area real GDP growth in 2008, both domestic and foreign demand are expected to support ongoing growth,” he added.
The ECB is under growing pressure to cut rates as signs of slowing global growth continue to emerge.
Amid concern that the US economy is sliding into a recession, the US Federal Reserve last month cut interest rates at the fastest pace since 1990, to 3%.
Adding to the pressure on the ECB, the Bank of England on Thursday lowered its benchmark rate by a quarter point to 5.25%, its second cut in three months.
Some analysts are expecting the ECB to cut rates by the middle of this year. (Xinhua)