The European Central Bank is almost certain to keep its key interest rate at 4% tomorrow given record inflation and signs of resilient economic growth, analysts say.
The ECB governing council gathers in Frankfurt tomorrow for its monthly rate-setting consultation, 10 years after the bank was created and one year after it raised the euro zone benchmark interest rate to its present level.
Economists said they expect the central bank to leave its main refinancing rate unchanged. In May, euro zone inflation shot back up to a record 3.6%, far above the ECB's target of just below 2%, owing mainly to persistently high energy and food prices.
Euro zone finance and political leaders gathered earlier this week in Frankfurt to mark the bank's first decade and many guests backed its undaunted quest for price stability via monetary policies that others deem too restrictive.
US and UK central banks have lowered their lending rates to 2% and 5%, respectively, to underpin growth threatened by housing crises following the collapse of the US market for sub-prime mortgages last August, and a subsequent tightening of credit.
Some European politicians initially urged the ECB to follow suit but muted their calls as inflation leapt higher earlier this year.
Even the International Monetary Fund, which had suggested the bank had ample room to cut the cost of borrowing, said yesterday: 'It is appropriate to keep policy rates on hold in light of persistently upward price pressures.
