Friday 5 April 2013

ECB leaves monetary policy unchanged as eurozone services sector deteriorates

Following the market-moving measures taken by the Bank of Japan on Thursday, the European Central Bank's monetary policy meeting later that day proved to be a more sedate affair.

The ECB left its main interest rate unchanged at 0.75 percent. At a press conference after the meeting, ECB President Mario Draghi said that “we will monitor very closely all the incoming information on economic and monetary developments, and assess the impact on the outlook for price stability”.

The weak eurozone economy could still push the ECB into further monetary stimulus though. A report on Thursday showed that Markit's index of services activity for the euro area fell to 46.4 in March from 47.9 in February, pushing the composite index down to 46.5 last month from 47.9 in the previous month.

The Bank of England also left monetary policy unchanged after its meeting on Thursday.

While the UK economy has also been struggling, data on Thursday were positive, with the Markit/CIPS services PMI rising to 52.4 in March from 51.8 in February.

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