The European Central Bank (ECB) kept its key interest rate at 2.5 per cent today as expected to leave financial markets anxious for signals on whether a May rate increase is likely.
Earlier today the Bank of England also kept interest rates steady, for the eighth month running, and many economists say borrowing costs could remain pegged at 4.5 per cent for the rest of the year.
With growing signs of a strengthening economy in the euro zone, the focus now turns to ECB President Jean-Claude Trichet, who could flag a May rate rise at his news conference at 12:30.
Markets have fully priced in a May rise after euro zone manufacturing and business activity recorded their strongest showing in over five years in March, and German business sentiment has soared.
Inflation at 2.2 per cent is slightly above the ECB's 2 per cent tolerance threshold, making it probable the Governing Council will deliver a third hike in this cycle before long.
But consumer demand has been patchy and retail activity sluggish.
Economists last week expected the ECB to keep rates on hold this month, while 40 expect a rate rise next month. Money markets also are starting to price a July rate rise, which would mark a quickening pace.
The ECB increased interest rates by a quarter percentage point at its March policy meeting, after it raised rates for the first time in five years in December.
The ECB's deposit facility pays a rate of 1.5 per cent, and its marginal lending facility continues to cost 3.5 per cent.