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ECB interest rate unchanged as Bernake warns of slowdown

ECB interest rate unchanged as Bernake warns of slowdown
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As predicted, the European Central Bank has left its benchmark interest rate unchanged at 4%. ECB President Jean-Claude Trichet and his policy makers took into account the conflicting demands of higher inflation and the impacts of the euro’s record strength on the region’s economic growth.

But as ever, Trichet was giving nothing away when he spoke to reporters. He said: “We will do what is necessary to continue to solidly anchor inflation expectations. We are looking very, very carefully at all the surveys, and all the information that we extract from the financial markets… and disorderly movements of exchange rates were never welcome.”

At the same time the Bank of England left UK interest rates on hold for the fourth month in a row as it is not convinced that the crisis in global credit markets is causing any significant slowdown in economic growth.

But the chairman of the US central bank, Ben Bernanke, is more pessimistic saying policy-makers expect economic growth there to slow “noticeably” in the fourth quarter of the year. Addressing a Congressional Economic Committee, he warned the US housing downturn is likely to intensify and consumer and business spending could slow.