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14 Nov 2013
ECB Monthly Report: Interest rates to stay at low levels for an extended period of time
FXstreet.com (Barcelona) - November's ECB Monthly Report includes information on the latest ECB meeting during which the Governing Council decided to cut rates by 25bps to 0.25%.
The Council stressed that the move was in line with the central bank´s forward guidance on rates, introduced in July 2013, “given the latest indications of further diminishing underlying price pressures in the euro area over the medium term, starting from currently low annual inflation rates of below 1%.”
The ECB declared its willingness to continue with the current accommodative monetary policy stance for as long as necessary, in oder to support the gradual recovery in the Eurozone, which is evident in the recently released confidence indicators. It also confirmed that interest rates would remain at current or lower levels for an extended period of time.
Furthermore, the ECB suggests that the "euro area may experience a prolonged period of low inflation, to be followed by a gradual upward movement towards inflation rates below but close to 2% later on.”
The central bank's forecasters see Eurozone GDP contracting by 0.4% in 2013, while in 2014 the economy should expand by +1% and in 2015 by 1.5%.
"As regards fiscal policies, the euro area budget deficit is projected to decline further from 3.1% of GDP in 2013 to 2.5% in 2014, according to the European Commission’s autumn 2013 economic forecast.”
The Council stressed that the move was in line with the central bank´s forward guidance on rates, introduced in July 2013, “given the latest indications of further diminishing underlying price pressures in the euro area over the medium term, starting from currently low annual inflation rates of below 1%.”
The ECB declared its willingness to continue with the current accommodative monetary policy stance for as long as necessary, in oder to support the gradual recovery in the Eurozone, which is evident in the recently released confidence indicators. It also confirmed that interest rates would remain at current or lower levels for an extended period of time.
Furthermore, the ECB suggests that the "euro area may experience a prolonged period of low inflation, to be followed by a gradual upward movement towards inflation rates below but close to 2% later on.”
The central bank's forecasters see Eurozone GDP contracting by 0.4% in 2013, while in 2014 the economy should expand by +1% and in 2015 by 1.5%.
"As regards fiscal policies, the euro area budget deficit is projected to decline further from 3.1% of GDP in 2013 to 2.5% in 2014, according to the European Commission’s autumn 2013 economic forecast.”