Rate cut is neither guaranteed nor ruled out

THERE were few surprises at the outcome of the ECB’s first governing council meeting of 2012.

The agency kept its official key refinancing rate unchanged at 1%. It had cuts rates by 0.25% at each of its two previous monthly policy meetings, fully reversing the two 0.25% rate hikes implemented in April and July of last year.

After these two rate cuts, no change was expected last week, as the ECB took time to assess their impact and the effect of the range of other measures it had adopted to counteract the weakening economy and malfunctioning markets.