The European Central Bank will not follow the US Federal Reserve in sending signals about the likely path of interest rates over many months, but stands ready to act "at any time", Jean-Claude Trichet, ECB president, said yesterday.
Any "pre-commitment" on interest rates might undermine the influence of the ECB, Mr Trichet warned in a speech in London. Instead, the bank would "remain pragmatic" and react to "facts and figures".
His comments highlighted the different approach taken by the ECB, as it starts to tighten monetary policy, compared with its US counterpart, which made clear in advance that rates were likely to rise steadily.
Mr Trichet signalled last week that the ECB would almost certainly raise its main interest rate by a quarter percentage point to 2.5 per cent in March, after a rise of the same amount in December, and his comments yesterday appeared to reinforce that message. Some economists believe that after raising borrowing costs in March, it may be some time before the ECB acts again.
Mr Trichet acknowledged that steering monetary policy was like driving a car but anticipating "the direction ahead relying on the images provided by the rear-view mirror".
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