The head of the European Central Bank has said it no 'bias' about its future policy, suggesting the bank is not about to raise or lower euro zone interest rates.
President Jean-Claude Trichet was speaking to reporters after the ECB left its key rate unchanged at 4.25% after a meeting in Frankfurt. The decision to leave rates on hold had been expected, following a quarter-point rise in July aimed at combating inflation.
But Mr Trichet again stressed that fighting inflation was the 'primary objective' of the ECB despite evidence of slowing growth. 'We will continue to monitor very closely all developments over the period ahead,' he added.
Mr Trichet repeated concerns about the possibility of an inflationary spiral as workers sought higher wages to cope with higher prices.
On growth, he said the fundamentals of the euro zone remained sound but that activity had slowed in the past few months. 'The latest economic data point to a weakening of real GDP growth in mid-2008, which in part was expected after the exceptionally strong growth in the first quarter,' he said. The ECB chief added that uncertainty surrounding the economic outlook remained high due to volatile commodity prices and continuing tensions in financial markets.
