FRANKFURT, Feb 4 (Reuters) - The European Central Bank is expected to hold interest rates steady at a record low of 1.0 percent at its Governing Council meeting on Thursday.
Below are key points from the ECB's policy statement compared with previous months. Capitals have been added by Reuters for emphasis.
OPENING PARAGRAPH:
-- JAN 14 --
'The current rates REMAIN APPROPRIATE.'
'Price developments are expected to remain SUBDUED OVER THE POLICY-RELEVANT HORIZON.
'Some of the factors supporting the growth in real GDP are of a TEMPORARY NATURE. Overall, the Governing Council expects the euro area economy to GROW AT A MODERATE PACE IN 2010, recognising that the recovery process is likely to be UNEVEN and that the outlook remains subject to UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
-- DEC 3 --
'The current rates REMAIN APPROPRIATE.'
'PRICE DEVELOPMENTS are expected to REMAIN SUBDUED over the policy-relevant horizon.'
'Some of the FACTORS SUPPORTING THE RECOVERY at present are of a TEMPORARY NATURE. The Governing Council expects the euro area economy to GROW AT A MODERATE PACE IN 2010, recognising that the recovery process is likely to be UNEVEN and that the outlook remains subject to HIGH UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
-- NOV 5 --
'The current rates REMAIN APPROPRIATE.'
'While annual HICP inflation was -0.1 percent in October, according to Eurostat's flash estimate, it is expected to TURN POSITIVE AGAIN IN THE COMING MONTHS and to REMAIN AT MODERATELY POSITIVE RATES OVER THE POLICY-RELEVANT HORIZON.'
'The latest information continues to SIGNAL AN IMPROVEMENT IN ECONOMIC ACTIVITY in the second half of this year. The Governing Council expects the euro area economy in 2010 TO RECOVER AT A GRADUAL PACE, recognising that the outlook remains subject to HIGH UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
ECONOMIC ANALYSIS: GDP
-- JAN 14 --
'A number of the supporting factors are of a TEMPORARY NATURE.'
'Low capacity utilisation rates are likely to DAMPEN INVESTMENT, and unemployment in the euro area is expected to increase somewhat further, thereby LOWERING CONSUMPTION GROWTH. For these reasons, the euro area economy is expected to grow only at a MODERATE PACE IN 2010 and the recovery process could be uneven.'
'The risks to this outlook as BROADLY BALANCED.'
-- DEC 3 --
'THE RECOVERY IS CONTINUING during the FOURTH QUARTER of 2009.'
'A number of the supporting factors are of a TEMPORARY NATURE and activity is likely to be affected for some time to come by the ongoing process of BALANCE SHEET ADJUSTMENT in the financial and the non-financial sector.'
'The euro area economy is expected to GROW only at a MODERATE PACE in 2010, and the recovery process is likely to be UNEVEN.'
'The risks to this outlook as BROADLY BALANCED.'
-- NOV 5 --
'Taking into account all available information, in the second half of this year, QUARTERLY REAL GDP GROWTH RATES COULD BE BACK IN POSITIVE TERRITORY.'
'Uncertainty remains high as a number of the supporting factors are of a TEMPORARY NATURE. Looking through the volatility of incoming data, the euro area economy is expected to RECOVER AT A GRADUAL PACE in 2010.'
'The risks to this outlook remain BROADLY BALANCED.' ------------------------------------------------------------
INFLATION
-- JAN 14 --
'Inflation is expected to remain AROUND 1 PERCENT in the near term. Looking further ahead, inflation is expected to remain MODERATE OVER THE POLICY-RELEVANT HORIZON, with overall price, cost and wage developments staying subdued.'
'Inflation expectations over the medium to longer term remain FIRMLY ANCHORED.'
'Risks to this outlook remain BROADLY BALANCED.'
-- DEC 3 --
'Inflation is expected to RISE FURTHER in the near term, mainly owing to upward BASE EFFECTS in the energy and food components. Looking further ahead, inflation is expected to remain MODERATE OVER THE POLICY-RELEVANT HORIZON, with overall price, cost and wage developments staying SUBDUED.'
'Inflation expectations over the medium to longer term remain FIRMLY ANCHORED.'
'Risks to this outlook remain BROADLY BALANCED.'
-- NOV 5 --
'IN THE COMING MONTHS, annual inflation rates are projected to TURN POSITIVE again. Thereafter, over the POLICY-RELEVANT HORIZON, inflation is expected to REMAIN POSITIVE, with overall price and cost developments staying SUBDUED reflecting ongoing sluggish demand in the euro area.'
'Inflation expectations over the medium to longer term remain FIRMLY ANCHORED.'
'Risks to this outlook remain BROADLY BALANCED.' ------------------------------------------------------------
MONETARY ANALYSIS
-- JAN 14 --
'The concurrent declines ... support the assessment of a decelerating underlying pace of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term. Looking ahead, M3 and credit growth are likely to remain VERY WEAK OR NEGATIVE for some time to come.'
'The subdued levels of production and trade, as well as the ongoing uncertainty surrounding the business outlook, will probably continue to DAMPEN FIRMS' DEMAND FOR BANK FINANCING in the months to come.'
'Banks should use the improved funding conditions to strengthen further their capital bases.'
-- DEC 3 --
'Concurrent declines continue to support the assessment of a moderate underlying pace of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term.'
'The growth of loans to enterprises typically picks up with some lag compared with the cycle in economic activity. In this respect, the still SUBDUED LEVELS OF PRODUCTION and trade, as well as the ongoing uncertainty surrounding the business outlook, are likely to DAMPEN FIRMS' DEMAND FOR BANK FINANCING also in the coming months.'
'Banks should address this challenge by taking appropriate measures to strengthen further their capital bases.'
-- NOV 5 --
'Concurrent declines support the assessment of a moderate underlying pace of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term.'
'In the case of households, the latest data provide further confirmation of a levelling-off at low rates.'
'In the case of non-financial corporations, the subdued levels of production and trade, as well as the ongoing uncertainty surrounding the business outlook, continue to dampen firms' demand for bank financing, a tendency which is likely to prevail in the coming months.'
'Banks should take appropriate measures to strengthen further their capital bases.' -----------------------------------------------------
NON-STANDARD MEASURES
-- JAN 14 --
'We will CONTINUE OUR ENHANCED CREDIT SUPPORT to the banking system, while taking into account the ONGOING IMPROVEMENT in financial market conditions and AVOIDING DISTORTIONS associated with maintaining non-standard measures for too long.'
'The Governing Council will also continue to implement the GRADUAL PHASING-OUT of the extraordinary liquidity measures that are NOT NEEDED to the same extent as in the past. In order to counter effectively any threat to price stability over the medium to longer term, the liquidity provided will be absorbed when necessary.'
-- DEC 3 --
'We also decided to continue conducting our main refinancing operations as FIXED RATE TENDER PROCEDURES WITH FULL ALLOTMENT for as long as is needed - and AT LEAST UNTIL the third maintenance period of 2010 ends on 13 APRIL.'
'We will CONTINUE TO USE THIS TENDER PROCEDURE in our special-term refinancing operations with a maturity of one maintenance period, which will continue FOR AT LEAST THE FIRST THREE MAINTENANCE PERIODS OF 2010.'
'We decided to carry out the LAST SIX-MONTH LONGER-TERM REFINANCING OPERATION on 31 March 2010. This operation will be carried out using a FULL ALLOTMENT FIXED RATE TENDER PROCEDURE, as will the regular monthly three-month longer-term refinancing operations already announced for the first quarter of 2010.'
-- NOV 5 --
'Monetary policy has been supporting the availability of liquidity and the recovery of the euro area economy. Looking ahead, and taking into account the improved conditions in financial markets, NOT ALL OUR LIQUIDITY MEASURES WILL BE NEEDED TO THE SAME EXTENT as in the past.
'The extraordinary liquidity measures taken are PHASED OUT IN A TIMELY AND GRADUAL FASHION and that the LIQUIDITY PROVIDED IS ABSORBED in order to counter effectively any threat to price stability over the medium to longer term.
(Compiled by Sakari Suoninen) Keywords: ECB/RATES STATEMENT (sakari.suoninen@reuters.com; +49 69 7565 1267; Reuters Messaging: sakari.suoninen.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Below are key points from the ECB's policy statement compared with previous months. Capitals have been added by Reuters for emphasis.
OPENING PARAGRAPH:
-- JAN 14 --
'The current rates REMAIN APPROPRIATE.'
'Price developments are expected to remain SUBDUED OVER THE POLICY-RELEVANT HORIZON.
'Some of the factors supporting the growth in real GDP are of a TEMPORARY NATURE. Overall, the Governing Council expects the euro area economy to GROW AT A MODERATE PACE IN 2010, recognising that the recovery process is likely to be UNEVEN and that the outlook remains subject to UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
-- DEC 3 --
'The current rates REMAIN APPROPRIATE.'
'PRICE DEVELOPMENTS are expected to REMAIN SUBDUED over the policy-relevant horizon.'
'Some of the FACTORS SUPPORTING THE RECOVERY at present are of a TEMPORARY NATURE. The Governing Council expects the euro area economy to GROW AT A MODERATE PACE IN 2010, recognising that the recovery process is likely to be UNEVEN and that the outlook remains subject to HIGH UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
-- NOV 5 --
'The current rates REMAIN APPROPRIATE.'
'While annual HICP inflation was -0.1 percent in October, according to Eurostat's flash estimate, it is expected to TURN POSITIVE AGAIN IN THE COMING MONTHS and to REMAIN AT MODERATELY POSITIVE RATES OVER THE POLICY-RELEVANT HORIZON.'
'The latest information continues to SIGNAL AN IMPROVEMENT IN ECONOMIC ACTIVITY in the second half of this year. The Governing Council expects the euro area economy in 2010 TO RECOVER AT A GRADUAL PACE, recognising that the outlook remains subject to HIGH UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
ECONOMIC ANALYSIS: GDP
-- JAN 14 --
'A number of the supporting factors are of a TEMPORARY NATURE.'
'Low capacity utilisation rates are likely to DAMPEN INVESTMENT, and unemployment in the euro area is expected to increase somewhat further, thereby LOWERING CONSUMPTION GROWTH. For these reasons, the euro area economy is expected to grow only at a MODERATE PACE IN 2010 and the recovery process could be uneven.'
'The risks to this outlook as BROADLY BALANCED.'
-- DEC 3 --
'THE RECOVERY IS CONTINUING during the FOURTH QUARTER of 2009.'
'A number of the supporting factors are of a TEMPORARY NATURE and activity is likely to be affected for some time to come by the ongoing process of BALANCE SHEET ADJUSTMENT in the financial and the non-financial sector.'
'The euro area economy is expected to GROW only at a MODERATE PACE in 2010, and the recovery process is likely to be UNEVEN.'
'The risks to this outlook as BROADLY BALANCED.'
-- NOV 5 --
'Taking into account all available information, in the second half of this year, QUARTERLY REAL GDP GROWTH RATES COULD BE BACK IN POSITIVE TERRITORY.'
'Uncertainty remains high as a number of the supporting factors are of a TEMPORARY NATURE. Looking through the volatility of incoming data, the euro area economy is expected to RECOVER AT A GRADUAL PACE in 2010.'
'The risks to this outlook remain BROADLY BALANCED.' ------------------------------------------------------------
INFLATION
-- JAN 14 --
'Inflation is expected to remain AROUND 1 PERCENT in the near term. Looking further ahead, inflation is expected to remain MODERATE OVER THE POLICY-RELEVANT HORIZON, with overall price, cost and wage developments staying subdued.'
'Inflation expectations over the medium to longer term remain FIRMLY ANCHORED.'
'Risks to this outlook remain BROADLY BALANCED.'
-- DEC 3 --
'Inflation is expected to RISE FURTHER in the near term, mainly owing to upward BASE EFFECTS in the energy and food components. Looking further ahead, inflation is expected to remain MODERATE OVER THE POLICY-RELEVANT HORIZON, with overall price, cost and wage developments staying SUBDUED.'
'Inflation expectations over the medium to longer term remain FIRMLY ANCHORED.'
'Risks to this outlook remain BROADLY BALANCED.'
-- NOV 5 --
'IN THE COMING MONTHS, annual inflation rates are projected to TURN POSITIVE again. Thereafter, over the POLICY-RELEVANT HORIZON, inflation is expected to REMAIN POSITIVE, with overall price and cost developments staying SUBDUED reflecting ongoing sluggish demand in the euro area.'
'Inflation expectations over the medium to longer term remain FIRMLY ANCHORED.'
'Risks to this outlook remain BROADLY BALANCED.' ------------------------------------------------------------
MONETARY ANALYSIS
-- JAN 14 --
'The concurrent declines ... support the assessment of a decelerating underlying pace of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term. Looking ahead, M3 and credit growth are likely to remain VERY WEAK OR NEGATIVE for some time to come.'
'The subdued levels of production and trade, as well as the ongoing uncertainty surrounding the business outlook, will probably continue to DAMPEN FIRMS' DEMAND FOR BANK FINANCING in the months to come.'
'Banks should use the improved funding conditions to strengthen further their capital bases.'
-- DEC 3 --
'Concurrent declines continue to support the assessment of a moderate underlying pace of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term.'
'The growth of loans to enterprises typically picks up with some lag compared with the cycle in economic activity. In this respect, the still SUBDUED LEVELS OF PRODUCTION and trade, as well as the ongoing uncertainty surrounding the business outlook, are likely to DAMPEN FIRMS' DEMAND FOR BANK FINANCING also in the coming months.'
'Banks should address this challenge by taking appropriate measures to strengthen further their capital bases.'
-- NOV 5 --
'Concurrent declines support the assessment of a moderate underlying pace of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term.'
'In the case of households, the latest data provide further confirmation of a levelling-off at low rates.'
'In the case of non-financial corporations, the subdued levels of production and trade, as well as the ongoing uncertainty surrounding the business outlook, continue to dampen firms' demand for bank financing, a tendency which is likely to prevail in the coming months.'
'Banks should take appropriate measures to strengthen further their capital bases.' -----------------------------------------------------
NON-STANDARD MEASURES
-- JAN 14 --
'We will CONTINUE OUR ENHANCED CREDIT SUPPORT to the banking system, while taking into account the ONGOING IMPROVEMENT in financial market conditions and AVOIDING DISTORTIONS associated with maintaining non-standard measures for too long.'
'The Governing Council will also continue to implement the GRADUAL PHASING-OUT of the extraordinary liquidity measures that are NOT NEEDED to the same extent as in the past. In order to counter effectively any threat to price stability over the medium to longer term, the liquidity provided will be absorbed when necessary.'
-- DEC 3 --
'We also decided to continue conducting our main refinancing operations as FIXED RATE TENDER PROCEDURES WITH FULL ALLOTMENT for as long as is needed - and AT LEAST UNTIL the third maintenance period of 2010 ends on 13 APRIL.'
'We will CONTINUE TO USE THIS TENDER PROCEDURE in our special-term refinancing operations with a maturity of one maintenance period, which will continue FOR AT LEAST THE FIRST THREE MAINTENANCE PERIODS OF 2010.'
'We decided to carry out the LAST SIX-MONTH LONGER-TERM REFINANCING OPERATION on 31 March 2010. This operation will be carried out using a FULL ALLOTMENT FIXED RATE TENDER PROCEDURE, as will the regular monthly three-month longer-term refinancing operations already announced for the first quarter of 2010.'
-- NOV 5 --
'Monetary policy has been supporting the availability of liquidity and the recovery of the euro area economy. Looking ahead, and taking into account the improved conditions in financial markets, NOT ALL OUR LIQUIDITY MEASURES WILL BE NEEDED TO THE SAME EXTENT as in the past.
'The extraordinary liquidity measures taken are PHASED OUT IN A TIMELY AND GRADUAL FASHION and that the LIQUIDITY PROVIDED IS ABSORBED in order to counter effectively any threat to price stability over the medium to longer term.
(Compiled by Sakari Suoninen) Keywords: ECB/RATES STATEMENT (sakari.suoninen@reuters.com; +49 69 7565 1267; Reuters Messaging: sakari.suoninen.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.