Another ECB interest rate cut looks unlikely

As expected, last week’s meeting of the ECB’s governing council saw no change to interest rate policy, with the main refi rate remaining at 0.5%.

The governing council reaffirmed its forward guidance on interest rates (ie that it expects official interest rates to “remain at present or lower levels for an extended period of time”).

The post-meeting statement from the ECB noted that the governing council will “remain particularly attentive to developments” in money market conditions. It indicated that it is “ready to consider all available instruments” to calm money market pressures. In the lead up to the meeting there had been some speculation that further long-term refinancing operations could occur before year-end, as the ECB looks to ease pressure on rates and maintain adequate liquidity in the eurozone.