The European Central Bank left interest rates unchanged as expected today, allowing the euro zone's economic recovery to build even as surging oil prices boost inflation.
The ECB said in a statement it had kept its benchmark refinancing rate at 2% but offered no explanation of the decision.
No news conference was scheduled for after the Governing Council discussion, which was held by telephone conference before policymakers take a four-week summer break. The next interest rate decision and news conference is scheduled for September 2.
Most economists expect the ECB to keep interest rates on hold into 2005 to give economic recovery time to find a steadier footing, despite high oil prices that have pushed headline inflation above the ECB's 2% ceiling.
The ECB has said it expects price stability to return next year but it is watching price developments closely in case companies and unions try to raise prices and wages in response to record oil prices, which could trigger an inflation spiral.
