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 "will provide only short-term relief and inflation will jump back to 3.5 percent in May."
Consumer prices rose a record 3.6 percent in March in the 15-nation eurozone, far above the ECB's medium-term target of just below 2.0 percent.
Oil prices hit fresh record highs above 122 dollars Tuesday, raising the stakes on inflation risks.
May said the latest eurozone data showed producer price inflation "climbed to a new record high and points to the danger of a sharp rise in core CPI (consumer price index) inflation over the coming months."
The bank was therefore unlikely to cut its benchmark refinancing rate.
While the US Federal Reserve has slashed rates to 2.0 percent, the ECB has maintained that eurozone growth remains on track and has kept its main rate locked in at 4.0 percent since June last year.
In Britain, the Bank of England cut its main interest rate to 5.00 percent in April but was expected to remain on hold when announcing its latest decision Thursday.
Some analysts, while expecting no change in ECB rates, flagged growing concern over economic prospects for the eurozone's 320 million people.
"The eurozone economy is losing momentum, gradually and in a very uneven fashion," noted Bank of America economist Holger Schmieding.
"The strong euro, the soft US economy and the global uncertainties weighing on domestic business investment are taking their toll," he said.
While some have begun to suggest that effects of the US subprime home loan crisis may be passing, "even if financial conditions do quickly improve, the wider economic fall-out from the credit crisis will persist for many months and, in some cases, years to come," said Julian Jessop at Capital Economics in a research note.
However ECB governors, led by Trichet, are particularly worried that wages and prices in general will in turn move higher in response to oil and food cost increases that the bank feels are temporary.
European unions have been demanding substantial pay increases for workers who have seen their purchasing power fall as food and fuel prices soared.
The ECB has warned repeatedly about what it calls second-round effects, when higher salaries fuel still higher inflation in a spiral that can quickly escape the bank's control.
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