ECB says it is too early to declare victory over crisis

IT IS still too early to declare victory over the financial crisis despite data pointing to a stronger recovery in the Eurozone, the European Central Bank (ECB) said yesterday.

The ECB chose to hold rates at a record low of one per cent, as expected, and said it would only decide next month whether to resume its exit from generous liquidity supplies.

Despite delivering an upbeat message about the economy and ruling out a return to recession, ECB President Jean-Claude Trichet remained cautious and said: “I do not declare victory.”

Trichet said interest rates remained at an “appropriate” level, bolstering the current consensus that they will stay on hold well into next year.

IHS Global Insight’s Howard Archer said: “The ECB gives every impression that it will keep interest rates down at one per cent for some considerable time to come.” Archer added the ECB remained sanguine about inflation.