No change as ECB thinks inflation will fall this year

 
Tim Wallace
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INTEREST rates remained unchanged in the Eurozone yesterday as European Central Bank (ECB) boss Mario Draghi reassured markets that he is on track to hit the inflation target of two per cent this year.

“Inflation is likely to stay above two per cent for several months to come before declining to below two per cent,” he said.

Although the interest rate decision was unanimous, Draghi stressed that the situation remains uncertain.

“Ongoing financial market tensions continue to dampen economic activity in the euro area, while, according to some recent survey indicators, there are tentative signs of stabilisation activity at low levels,” he explained.

However, “the economic outlook remains subject to high uncertainty and substantial downside risk”.