ECB picks its code words with caution

THE ECB surprised financial markets for the second time in as many months last week.

Having signalled its intent to raise interest rates two months ago, last week’s meeting brought somewhat better news in that the ECB refrained from doing something similar this time around.

In April the ECB used the phrase “monitor very closely” to describe its prevailing posture — language historically followed by a rate hike in two months time.