The European Central Bank (ECB) left interest rates on hold today, as it moved to further roll back the emergency monetary measures it introduced to shore up financial market confidence, dpa reported. But coming amid signs of weak inflation and fragile economic indicators, the ECB's rate-setting council is predicted to keep borrowing costs at their historic low of 1 per cent well into the year. Announcing a series of steps to withdraw the emergency measures, ECB chief Jean-Claude Trichet said the banking system in the 16-member eurozone will continue to receive special liquidity measures at "very favorable conditions." With the ECB keen to normalize markets as the financial crisis slowly ebbs, Trichet said the moves were part of the bank's plans for "a gradual and timely" withdrawal of emergency lending measures introduced in the wake of the global financial firestorm. In London, the Bank of England (BoE) announced that it had left interest rates on hold at a record low of 0.5 per cent and had not increased the funds made available under its emergency monetary scheme, the so-called quantity easing programme. The moves had been expected by financial markets. Preliminary data released Tuesday showed the eurozone's annual inflation rate came in at 0.9 per cent in February, slipping from 1.0 per cent in January. Moreover, consumer prices in the eurozone are forecast to remain well below the ECB's 2-per-cent ceiling for annual inflation for the coming months. Thursday's statements from the ECB governing council meeting and the BoE monetary policy committee came just one day after Greece announced its third round of tough budget cuts aimed at slashing its ballooning deficit and debt levels.
