ECB signals end to interest rate cuts

The European Central Bank (ECB) signalled on Thursday it planned no further interest rate cuts as eurozone prospects improved, but said subdued inflation meant it would continue to pump more stimulus into the region's economy.

The currency bloc has been on its best economic run since the global financial crisis nearly a decade ago but the ECB had been expected to take a more cautious stance as the inflation rebound has yet to show a convincing upward trend.

"The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases," the bank said, removing a long-standing reference to lower rates.

It kept its easy money policy unchanged as widely expected, however, including its ?2.3 trillion ($2.59 trillion) bond buying programme and sub-zero interest rates, despite resistance from cash-rich Germany.

Announcing small upgrades in its growth forecasts through to 2019, ECB president Mario Draghi told a news conference the bank no longer saw risks to growth as being skewed to the downside.

"We consider that risks to the growth outlook are now broadly balanced," he told reporters in the Estonian capital of Tallinn, in a widely expected move.

But the bank trimmed inflation forecasts for the next three years and said "substantial" amounts of stimulus through its unprecedented asset purchase scheme were still needed. Draghi said there was no discussion of future tapering at the meeting. - Reuters

Source: Khaleej Times