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ECB set to hold rates steady amid market calm

FRANKFURT -- The European Central Bank is set to keep interest rates on hold this week as it takes stock of the newfound calm on the financial markets, analysts predict.

“The continued improvement in financial market conditions and surveys of economic activity has taken some of the pressure off the ECB this month,” said Capital Economics economist Jennifer McKeown.

“We expect the bank to strike a relatively hawkish tone after its forthcoming meeting, stating that no further policies are needed at present,” she said.

With ECB interest rates currently at a record low of 0.75 percent and its latest anti-crisis weapon ready and primed for action, central bank chief Mario Draghi believes the bank has already done its utmost and it is up to governments to resolve the long-running crisis, economists said.

“Draghi will again call on politicians to use the calm on the financial markets for structural reforms,” suggested Commerzbank economic Michael Schubert.

“We do not expect any further measures from the ECB.”

Evidence appears to suggest that the eurozone could finally be emerging from its three-year-old sovereign debt crisis with confidence indicators all across the single currency area pointing upwards.

Last week, the clouds of economic gloom lifted when the EU's eurozone confidence index rose markedly for the third month running.

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