The ECB considered raising its key interest rates by half a percentage point at its meeting in Madrid yesterday, but the 'overwhelming majority' of the bank's governing council deemed a quarter-point hike more appropriate, ECB president Jean-Claude Trichet said.
'The overwhelming majority of the governing council thought that a 25-basis point increase was appropriate,' Trichet told a news conference. 'But we did weigh the assets and liabilities of a 50-basis point rise.'
The European Central Bank chief said that additional rate hikes were on the cards in the future if the euro zone recovery continued to gather momentum. 'If our (recovery) scenario is confirmed, then further withdrawal of monetary accommodation is warranted,' Trichet said.
The ECB has notched up its benchmark 'refi' refinancing rate three times since December, each time by 0.25 points. With the latest move, the refi rate now stands at 2.75%.
However, the ECB was not committed to moving rates again by a quarter of a percentage point every three months, Trichet insisted. 'We have no ex-ante pre-commitment' to such a regular rhythm of rate increases, he said.
