The European Central Bank (ECB) as expected raised its benchmark interest rate from 1.0% to 1.25%, at a meeting of the governing council in Frankfurt, today. In London, the Bank of England kept its rate on hold at 0.5% -- the lowest since it was founded in 1694.
It was the first ECB rate rise since July
2008, when the rate was hiked to 4.25% and subsequently cut in a series that
ended at 1% in May 2009.
Eurozone annual inflation hit 2.6% in March compared with the ECB's target of "below but close to 2%."
ECB President Jean-Claude Trichet will address a press conference from 1:30 pm Irish time.
In London, the Bank of England’s Monetary Policy Committee today voted to maintain the official bank rate paid at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200bn - - purchases of sovereign bonds known as quantitative easing.
The minutes of the meeting will be published at 9.30am on Wednesday 20 April.
The previous change in bank rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. The programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The most recent change in the size of that programme was an increase of £25bn to a total of £200bn on 5 November 2009.
The Bank said it will continue to offer to purchase high-quality private sector assets on behalf of the Treasury, financed by the issue of Treasury bills, in line with the arrangements announced on 29 January 2009.
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