At today’s meeting, the Governing Council of the European Central Bank(ECB) announced that the key ECB interest rates are unchanged with the interest rates on main refinancing operations, marginal lending facility and the deposit facility at 0.00%, 0.25% and -0.40% respectively. The rates are expected to remain at the current level for an extended period of time, well past the horizon of net asset purchases.  Monthly asset purchases will run at the current pace of €30 billion per month until September 2018 or until inflation makes a sustained adjustment that is consistent with inflation target. The ECB noted that monetary stimulus remains necessary for underlying inflation pressure to continue to build up.

Euro area real GDP grew 0.7 per cent in Q4, similar to the previous quarter. The latest data indicate some moderation in the pace of growth since the start of the year. Overall, growth is expected to remain solid and broad-based. Private consumption is is supported by employment gains, partly due to labour market reforms as well as growing household wealth. Favourable financing conditions are strengthening business investment, with improving housing investment and global expansion contributing to euro area exports. 

Euro area inflation was 1.3 per cent in March, from 1.1 per cent in February, reflecting higher food price inflation. Annual rates of headline inflation are expected to hover around 1.5 per cent for the remainder of the year.  

Sources:
European Central Bank