President of the ECB Jean Claude Trichet in his press conference after holding the interest rate unchanged at 1.00% in June said the economy started t rebound from spring with the improvement in weather conditions. He predicts economic growth to be at a moderate pace over the medium term as balance sheet adjustments and high unemployment will affect the progress seen recently.
Trichet raised the euro-area growth forecast for 2010 to 1% from 0.8%, while in 2011 the ECB expects the euro area to expand 1.2%, lower than the previous estimates of 1.5% due to decline in consumer spending
With regard inflation, he confirmed that the current low interest rate is appropriate while the emergency measures are non-standard measures are consistent with the bank's mandate and temporary in nature. price stability is predicted to remain maintained over the medium term, while inflation projections stay tightly anchored.
He also raised inflation estimates to 1.5% this year compared with the prior 1.2% and to 1.6% next year from 1.5%.