ECB inflation expectations increasing

The European Central Bank (ECB) has kept its interest rate steady at 4 percent, meaning it is currently at a four year high.

It remains to be seen whether this high rate is enough to counter the underlying threat of inflation across the euro zone, as a result of continuing rises in the cost of energy, raw materials and food.

Throughout this, the ECB have maintained the fact that it is important to keep the expectations about inflation in line with current trends, although the next meeting for policymakers is June 5th.

So far in the last month, euro-region inflation has increased to 3.5 percent from 3.3 percent in April, although the EU statistics office will release official figures tomorrow.

Analysts, as well as council members, agree that the ECB must remain flexible with the current situation and the option of raising interest rates, in order to curb inflation, must continue to be seen as a viable option.

The central bank has, however, acknowledged the fact that price hikes have been the root cause of inflation exceeding targets year-on-year since 2000 and that they have not reached their price stability goal.

The current high inflationary threat has brought the single monetary union of the euro zone countries into light as inflation is currently below previous levels as well as increased solidity and stability.

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