‘Hands-off’ approach by ECB is bewildering

It was not wholly shocking that the ECB left its key interest rate unchanged at its record low level of 1% this week.

There had been some modest expectation that the ECB might move on rates as part of the alleged shift among EU policymakers towards more of a pro-growth strategy following the recent French election.

The ultra-conservative ECB board left rates unchanged and gave little indication that it is on the brink of cutting rates again. It was also somewhat reticent about committing further funding on a three-year basis to the banking system and further bond purchasing.