April 24, 2008	Thursday	Rabi-us-Sani 17, 1429

FRANKFURT, April 23: The ECB is holding firm on interest rates while waiting to see if global growth and commodity prices run out of steam, analysts said on Wednesday following new insights from central bank policymakers.

“A crucial question is whether commodity inflation is here to stay or not,” said Marco Annunziata of UniCredit Markets in a research note.

“If commodity inflation remains at current levels, the monetary policy dilemma becomes much harder.”

At Capital Economics, Jennifer McKeown told AFP: “We think that the ECB’s attention is going to turn to slowing activity, and probably a lot sooner than markets think.”

A member of the European Central Bank’s governing council, French central bank head Christian Noyer, told the Wall Street Journal Europe on Wednesday that commodity and energy prices could fall if economic activity slumped more than expected. His remark implied that might justify an easing of rates.

High oil and food prices pushed inflation to a record 3.6 per cent in March for the 15 countries that share the euro.—AFP