ECB says expectations of rate hikes are unwarranted

The European Central Bank has made no significant changes to its outlook on the euro area, saying that risks for the euro continue to be on the downside (here's the full text of his opening statement).

European Central Bank president Mario Draghi said that the recent tightening of market rates may weigh on growth. He reaffirmed that interest rates would be kept low for as long as the governing council sees inflation remaining subdued, as indicated by "weak economic activity, weak credit, and weak monetary aggregates". The governing council was unanimous in this decision, he said. Echoing Carney, Draghi added that current expectations of rate hikes in money markets are unwarranted.

Draghi said it is essential that the fragmentation of the eurozone markets declines further, and that bank resilience increases where it needs to. He hopes that a full banking union could help to accomplish this objective.

He added that governments must not unravel their efforts to minimise their fiscal deficits.

This follows the news that the ECB would hold interest rates, as City A.M. reported earlier.