ECB focuses on inflation as governors meet in Athens

ATHENS, May 7, 2008 (AFP) – The European Central Bank is widely expected to leave its key interest rate unchanged again Thursday, focusing as it is mandated to do on inflation rather than the risk to growth, analysts say. The ECB governing council meets here at a twice-annual event organised in a eurozone capital, hosted this time by Greek central bank governor Nicholas Garganas, who has said he will step down when his term expires in June.

“We expect interest rates to remain on hold for a while longer yet,” Capital Economics economist Ben May said in a research note.
At Bankhaus Lampe, Alexander Krueger said the ECB would undoubtedly “meet expectations of a monetary status quo.”

On Monday, ECB president Jean-Claude Trichet noted that “global growth remains significant despite the slowing down observed in a number of industrialised economies, and clearly thanks to the remarkable resilience of a great number of emerging economies.”

Inflation remained a threat however and was present in “all economies without any exception,” Trichet warned, after meeting other central bankers at the Bank for International Settlements in Basel.

UniCredit analysts said a dip in eurozone inflation to 3.3 percent in April “w