ECB says rate decisions will reflect ongoing data

EUROPEAN Central Bank rates have not necessarily reached a bottom and future decisions will be taken on the basis of ongoing economic data, Governing Council member John Hurley said yesterday.

The ECB said it expected the eurozone recession to last for another year when it held rates at 1% on Thursday and Mr Hurley said a “gradual” recovery would take time.

“We haven’t taken any decision that this is necessarily the lowest rate. We never pre-commit. We have to assess the data as it emerges and make our decision on the basis of that data,” Mr Hurley said.

“We know we’re going to have a difficult 2009 with a significant contraction. Our recovery is going to take time, it will be gradual but we’re expecting to see the benefits of that in 2010.”

Mr Hurley said forecasts for recovery would have to be made cautiously, but said some signs in soft data approximated a bottoming out.

“We have seen globally some signs in the soft data of a bottoming out, but we have to wait for hard data before we can say a corner has been turned,” said Mr Hurley, who is the governor of Ireland’s Central Bank.