Relief as ECB leaves rates on hold

HOMEOWNERS received further confirmation yesterday that interest rates will remain at their record low over the coming months.

The European Central Bank (ECB) once again left rates unchanged at 1% and signalled that there will be no movement on rates any time soon.

ECB president Jean-Claude Trichet also said Ireland’s approach to dealing with the poor state of public finances has been “quite impressive”.

He referred to the “bold and courageous decisions which have been taken to put the economy back on its feet in difficult and demanding circumstances” in Ireland.

Interest rates have been left on hold since May of last year when a 0.25% reduction took them to 1%. According to 51 economists surveyed by Bloomberg the bank will not raise rates until the fourth quarter.

Mr Trichet signalled that officials will wait for more signs of economic recovery before withdrawing emergency measures further.

“The current rates remain appropriate,” Mr Trichet said.

Chief European economist at Fortis Bank, Nick Kounis said: “The ECB doesn’t want to do anything at this stage to rattle any cages.

“While we’re not heading back into recession, there are increasing signs the recovery is losing momentum. They are going to be cautious.”

Mr Trichet took a tough line on Greece’s mounting debt crisis, saying that it wouldn’t get any special treatment from European officials.