The European Central Bank are set to meet tomorrow to discuss interest rate policy amongst the thirteen nation Eurozone for the coming month.

The European Central Bank determines rate policy for the thirteen member states of the Eurozone, and is expected to keep rates on hold after early predictions of a rise failed to materialize as a likely option.

Analysts have widely predicted that rates will remain the same over the next month, with financial markets continuing uncertainty likely to be the main persuasive factor in the decision to maintain rates, along with tightening credit conditions across the globe.

Up until markets had been thrown into uncertainty by bad news from the US and the ongoing crisis in sub-prime lending, the European Central Bank had been expected to raise rates from 4% to 4.25% for the thirteen nations in the single currency zone.

Also scheduled for tomorrow, the Bank of England in London will be meeting to fix interest rates, which are again predicted to be maintained for the next month at 5.75% in order to allow the UK economy to settle down a find a rhythm unaffected by the global stock market volatility.

Meanwhile banks in Australia, Canada and Brazil also maintained their interest rates, for fear of upsetting the global financial market and causing further unrest in the global finance sector.

With the US sub-prime sector yet again causing problems for liquidity at lending institutions, central banks across the world have maintained interest rates in order to prevent any further volatility in trading, in what has been described as a ‘wait and see’ measure.

Inflation within the Eurozone had been down to 1.8%, within the European Central Bank’s unofficial comfort zone, with growth slowing across most of the major European economies singularly, and the region as a whole.

Tags: ECB: European Central Bank News //