At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 1.50%, 2.25% and 0.75% respectively.
Reuters reported earlier today that Citi's chief economist Willem Buiter thinks that the ECB should change its hawkish policy and instead cut the rate in October, as a parting gift from Trichet. ECB should concentrate on bailing out Italy and Spain.
it would fall to the ECB, rather than the EFSF bailout fund, to act as the lender of last resort given funding needs of Italy and Spain that run into the hundreds of billions of euros each year
Bank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £200 billion
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.
The minutes of the meeting will be published at 9.30am on Wednesday 21 September.
Note to Editors
The concern over public finances abroad has increased and global growth prospects have deteriorated. The slowdown in the Swedish economy is thus expected to be more pronounced than was forecast in July. The Executive Board of the Riksbank has therefore decided to now hold the repo rate unchanged at 2 per cent and to postpone continued increases slightly.
Unrest in the financial markets
Jean Claude Trichet;
Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will report on the outcome of today’s meeting of the Governing Council, which was also attended by Commissioner Rehn.