The European Central Bank on Thursday left its benchmark interest rate unchanged, choosing to wait for additional data before deciding whether to address evidence that the euro zone is sliding into the dangerous economic condition known as deflation. Mario Draghi, the central bank’s president, acknowledged at a news conference that the 0.7 percent inflation rate in January was lower than expected and said that it would remain low over the coming months but then gradually climb back to the bank’s target of just below 2 percent. “We have to dispense with the question, ‘Is there a deflation?’ and the answer is, ‘No,’ ” he said. The E.C.B. said last month that bank lending to euro zone companies fell 2.3 percent in December from a year earlier, while the broad money supply in the euro zone grew just 1 percent, well below the 4.5 percent that the central bank believes is consistent with its price stability goals.
Source: New York Times