The ECB held its main refinancing rate at 1% today but perhaps more interestingly, appears to have favoured the path of ‘austerity’ in the euro-zone region. Developments on inflation were deemed to be in line with price stability over the medium term, with risks described as ‘broadly balanced’. Inflation expectations were seen as anchored to the ECB’s target of ‘below but close to, 2%’. But Mr. Draghi repeated that the ECB was prepared to act in a ‘firm and timely manner’ to meet this target should the need arise.
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