The European Central Bank has kept its interest rates at the current record low of one percent.
The Governing Council was in Luxembourg for one of its two annual meetings outside of Frankfurt. ECB president Jean-Claude Trichet said that he was not overly concerned about falling prices, which he said would be “short-lived.” “The fall of annual inflation rates into negative territory in June is in line with previous expectations and reflects mainly temporary effects,” he said. The ECB also announced its 60 billion-euro company bond-buying scheme would start next Monday. Last week it lent banks almost half a trillion euros to get them lending to their customers again. Meanwhile, Sweden’s central bank took the surprise step of cutting its key interest rate from 0.5 percent to 0.25 percent. It has never been lower. Despite some evidence of Swedes’ consumer confidence stabilising, demand remains low and the Riksbank said that the severity of the slowdown meant the rate cut was necessary.