ECB leaves key lending rate unchanged at six-year high
Updated: 2008-05-08 23:42
BERLIN -- European Central Bank (ECB) on Thursday decided to leave its benchmark lending rate unchanged at a six-year high of 4 percent, stressing that fighting inflation remains the bank's primary objective.
"Inflation rates have risen significantly since autumn, owing mainly to the increases of energy and food prices," said ECB President Jean-Claude Trichet at a press conference on Thursday after the ECB governing council meeting in Athens.
"Inflation rates are expected to remain high for a rather protracted period of time, before gradually declining again," a press release on the website of the Frankfurt-based ECB quoted Trichet as saying in Athens.
He also said that the level of uncertainty resulting from the turmoil in financial markets remains "unusually high and tensions still persist".
"Against this background, we emphasise that maintaining price stability in the medium term is our primary objective in accordance with our mandate. The firm anchoring of medium to longer-term inflation expectations is of the highest priority," Trichet said.
The ECB last raised its benchmark refinancing rate to 4 percent last June and has kept it stable ever since.
In contrast, the US Federal Reserve has repeatedly slashed its key rate since last September in a bid to spur economic growth amid financial turmoil.
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