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ECB keeps rates steady
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October 21, 1999: 8:11 a.m. ET
European Central Bank maintains 2.5% refinancing rate; November hike likely
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LONDON (CNNfn) - The European Central Bank (ECB) elected to leave its key interest rate unchanged at 2.5 percent Thursday, raising expectations that it will raise rates at its next meeting Nov. 4.
Members of the bank's executive council have taken a more hawkish stance in recent days, indicating a bias toward tightening policy.
However, most economists believe it is waiting for more evidence that European growth is picking up, though they remain divided over the size of the expected increase.
Phyllis Reed, chief international bond strategist at Barclays Capital, predicts a quarter-point rise in November. At that time, the ECB will present money-supply growth data, which has become a key indicator for the bank along with inflation.
However, while the market is moving toward a consensus for a move on Nov. 4, other economists believe the Frankfurt-based bank will seek to take back the entire half-point cut instituted when global growth looked set to stagnate.
While inflation in the 11-nation euro-zone remained steady at an annualized 1.2 percent in September, growing pressures from rising commodity prices and wage settlements are putting upward pressure on prices.
The euro, which had traded flat against the dollar at $1.0775 ahead of the announcement, slipped back slightly to $1.0765. 
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European Central Bank
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