La European Central Bank and the Bank of England they kept reference rates unchanged respectively at 0,25% (historic low reached two months ago) and 0,5%. The decision is in line with market and analyst expectations.
Furthermore, in the Eurozone, the rates on marginal refinancing operations remain at 0,75% and those on deposits kept by the ECB on behalf of the banks at zero. Now the focus is shifting to the inflation projections for 2014 and 2015, so as to imagine what the monetary policy could be in the near future.
The ECB and the central banks of the single currency countries (together they make up the Eurosystem) are against the six-month extension of the transition to the SEPA format for payments in euros. In a press release, the Eurosystem warns that it "has taken note of the Commission's proposal" and indicates that "the most recent information indicates that the pace of migration is high and is accelerating and the vast majority of actors will complete it in time".
Meanwhile, some positive indications have been recorded in recent days from data on the currency union. Last, today, the one on climate of trust which rose to a two-and-a-half-year high in December, mainly driven by the consumer component. Eurostat has just reported the largest monthly increase in consumption for 12 years now: +1,4% in November from the previous month.
But the indicators are not univocal: the dynamics of consumer prices, usually closely correlated to sales and confidence trends, continue to be weak. The same EU statistics body reported that in December inflation stood at 0,8%, one decimal place less than the previous month, again moving away from the values hoped for by the ECB.
Frankfurt's definition of “price stability” is inflation below but close to 2% per annum on the average for around 18 months. And meanwhile, average unemployment, although stabilizing at 12,1%, remains very close to historical highs.
For its part, the Bank of England has confirmed the asset purchase program at 375 billion pounds. Interest rates have remained unchanged in the UK since March 2009 and the BoE has indicated that the cost of borrowing will remain low at least until the unemployment rate falls below 7% (ie, according to estimates, in 2015).
