The European Central Bank (ECB) decided this morning to leave its benchmark rate unchanged at .25 percent for the month of February despite continuing signs of disinflation in the 18 member euro area currency bloc.
Economists were divided about whether the ECB should leave its benchmark rate unchanged or cut the rate even lower to help stimulate economic growth and combat the risks of deflation.
Last week the year on year inflation rate across the euro-area came in at 0.7 percent for January, a new record low and below December’s reading of 0.8 percent, renewing concerns about persisting deflation in the euro-area.
ECB President Mario Draghi said today that the euro-area faces a prolonged period of low inflation while admitting that risks to euro-area growth will remain on the downside.
Draghi will hold a press conference with reporters today at 8:30 am EST.
The ECB kept a separate rate for overnight bank deposits at zero.
The Bank of England decided today to leave its key lending rate at a record low of 0.5 percent and maintain its current bond buying program.