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| E.C.B. Keeps Rates Steady as Inflation Shows Signs of Rising | E.C.B. Keeps Rates Steady as Inflation Shows Signs of Rising |
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| FRANKFURT — The European Central Bank made no changes on Thursday in its program to revive the eurozone economy, as it expressed slightly more optimism about the prospects for growth in the region. | FRANKFURT — The European Central Bank made no changes on Thursday in its program to revive the eurozone economy, as it expressed slightly more optimism about the prospects for growth in the region. |
| The lack of any significant policy moves was expected. Growth in the 19-member eurozone is neither so terrible that it requires a new burst of stimulus from the bank nor so torrid that there is a need to apply the brakes, analysts say. The European Central Bank’s Governing Council is now expected to pause for a while, after several years in which it pushed the boundaries of monetary policy. | The lack of any significant policy moves was expected. Growth in the 19-member eurozone is neither so terrible that it requires a new burst of stimulus from the bank nor so torrid that there is a need to apply the brakes, analysts say. The European Central Bank’s Governing Council is now expected to pause for a while, after several years in which it pushed the boundaries of monetary policy. |
| The bank left its benchmark interest rate at zero, where it has been since March. It also left intact a penalty rate of minus 0.4 percent on money that commercial banks keep at the central bank. The so-called negative interest rate is designed to force commercial banks to lend money rather than hoard it. | The bank left its benchmark interest rate at zero, where it has been since March. It also left intact a penalty rate of minus 0.4 percent on money that commercial banks keep at the central bank. The so-called negative interest rate is designed to force commercial banks to lend money rather than hoard it. |
| Mario Draghi, the president of the European Central Bank, said that growth in the eurozone this year would be 1.6 percent, slightly more than earlier forecasts. But the bank’s economists left their growth predictions for 2017 and 2018 unchanged at 1.7 percent for both years. | Mario Draghi, the president of the European Central Bank, said that growth in the eurozone this year would be 1.6 percent, slightly more than earlier forecasts. But the bank’s economists left their growth predictions for 2017 and 2018 unchanged at 1.7 percent for both years. |
| Mr. Draghi said at a news conference in Vienna that although the risks facing the eurozone had declined, “it’s not a dramatic effect.” | Mr. Draghi said at a news conference in Vienna that although the risks facing the eurozone had declined, “it’s not a dramatic effect.” |
| The bank has already made aggressive moves in recent months by buying government debt in large quantities and cutting interest rates to their lowest levels. This month, the bank will expand those measures by buying corporate bonds and by effectively paying banks to lend to businesses, all in a bid to spur Europe’s economy. | The bank has already made aggressive moves in recent months by buying government debt in large quantities and cutting interest rates to their lowest levels. This month, the bank will expand those measures by buying corporate bonds and by effectively paying banks to lend to businesses, all in a bid to spur Europe’s economy. |
| Analysts would have been surprised, indeed shocked, if the bank had taken action on Thursday after a monetary policy meeting in Vienna, one of the Governing Council’s periodic forays outside its base in Frankfurt. | Analysts would have been surprised, indeed shocked, if the bank had taken action on Thursday after a monetary policy meeting in Vienna, one of the Governing Council’s periodic forays outside its base in Frankfurt. |
| The bank is also not expected to make any major changes to policy for some time to come. The meeting on Thursday “was a continuation of a series of wait-and-see events,” Christoph Kutt, head of interest rate strategy at DZ Bank in Frankfurt, said in an email. | The bank is also not expected to make any major changes to policy for some time to come. The meeting on Thursday “was a continuation of a series of wait-and-see events,” Christoph Kutt, head of interest rate strategy at DZ Bank in Frankfurt, said in an email. |
| Inflation in the eurozone was minus 0.1 percent in May, according to an official estimate on Tuesday, still far from the bank’s official target of 2 percent. But a 1 percent increase in the price of services in May, as well as a turnaround in oil prices that has pushed them near $50 a barrel from around half that in January, signal that overall inflation could rise in months to come. | Inflation in the eurozone was minus 0.1 percent in May, according to an official estimate on Tuesday, still far from the bank’s official target of 2 percent. But a 1 percent increase in the price of services in May, as well as a turnaround in oil prices that has pushed them near $50 a barrel from around half that in January, signal that overall inflation could rise in months to come. |
| To the disappointment of some analysts, the central bank did not raise its inflation forecasts for 2017 and 2018. That is a sign that the bank remains concerned about the risk of deflation, a sustained decline in prices that can be disastrous for economic growth and employment. | To the disappointment of some analysts, the central bank did not raise its inflation forecasts for 2017 and 2018. That is a sign that the bank remains concerned about the risk of deflation, a sustained decline in prices that can be disastrous for economic growth and employment. |
| The European Central Bank’s charter defines its main job as keeping inflation below 2 percent, but not too far below it. | The European Central Bank’s charter defines its main job as keeping inflation below 2 percent, but not too far below it. |
| Another reason the central bank had not been expected to announce new stimulus on Thursday is that its previous measures are just going into effect. In March, it said it would begin buying corporate bonds in an expansion of its so-called quantitative easing program, a way of pumping money into the economy. Those purchases are scheduled to begin on June 8. | Another reason the central bank had not been expected to announce new stimulus on Thursday is that its previous measures are just going into effect. In March, it said it would begin buying corporate bonds in an expansion of its so-called quantitative easing program, a way of pumping money into the economy. Those purchases are scheduled to begin on June 8. |
| In addition, the central bank will begin a program on June 22 intended to address a shortage of credit in countries like Italy. Under some circumstances, the European Central Bank will pay commercial banks to take its money, which the banks must lend to customers. | |
| The central bank will want to take some time to see how those programs are working, analysts said. | The central bank will want to take some time to see how those programs are working, analysts said. |
| The eurozone economy is recovering, but slowly and unevenly. During the first quarter, the total value of goods and services produced in the eurozone surpassed the previous peak reached in early 2008, before the region was struck by financial and debt crises. | The eurozone economy is recovering, but slowly and unevenly. During the first quarter, the total value of goods and services produced in the eurozone surpassed the previous peak reached in early 2008, before the region was struck by financial and debt crises. |
| But unemployment remains above 10 percent and is falling only gradually, and eurozone growth is not so brisk that economists see any need for the bank to think about removing stimulus to prevent overheating. That is in contrast to the Federal Reserve, which is expected to raise interest rates in the United States as early as its next meeting, June 14 and 15. | |
| Along with questions about the direction of the economy, there is potential for a new crisis that would push the European Central Bank to mobilize. | Along with questions about the direction of the economy, there is potential for a new crisis that would push the European Central Bank to mobilize. |
| Britain will hold a referendum on June 23 about whether to remain a member of the European Union. A vote to quit the union would raise concerns that other members would leave, perhaps causing the bloc to fall apart. The uncertainty would have an economic effect, making businesses cautious about hiring and investing. | Britain will hold a referendum on June 23 about whether to remain a member of the European Union. A vote to quit the union would raise concerns that other members would leave, perhaps causing the bloc to fall apart. The uncertainty would have an economic effect, making businesses cautious about hiring and investing. |
| In such a situation, the central bank would be under pressure to intervene once again. | In such a situation, the central bank would be under pressure to intervene once again. |
| Mr. Draghi said on Thursday that he and other members of the Governing Council believed that Britain should remain in the European Union. But if British voters elect to leave, he said, “The E.C.B. is ready for all contingencies.” | Mr. Draghi said on Thursday that he and other members of the Governing Council believed that Britain should remain in the European Union. But if British voters elect to leave, he said, “The E.C.B. is ready for all contingencies.” |