The European Central Bank held its key interest rate at 2.25 per cent today, in line with market expectations that the ECB will bide its time until March before delivering a second rate rise.
By then the inflation outlook and strength of economic recovery will probably be clearer. Analysts are awaiting ECB President Jean-Claude Trichet's news conference this afternoon for any clue on how close the next rate move is.
National central bank governors had no policy comment to make when they entered the ECB's Frankfurt headquarters today. But Dutch ECB policymaker Nout Wellink said on Sunday that stronger growth, even with a steady inflation outlook, would boost the chances of a rate rise. ECB President Jean-Claude Trichet and other policymakers, however, have stressed that no future rate increases are planned yet.
But financial analysts have interpreted comments of no "ex ante" plans for further increases following December's quarter percentage point rise as a concession to dovish members of the ECB's rate-setting Governing Council.
They expect two more quarter point rises by mid year but none of those polled by Reuters forecast a change this month.
Financial markets were little changed after the ECB's rate decision with the euro steady at $1.2134 and rate sensitive two-year bond yields at 2.855 per cent.
On futures markets, March Euribor contracts were unchanged at 97.305, as were June contracts at 97.140.
The Bank of England earlier held its main interest rate at 4.50 per cent, as expected.