May 8 - Rates on hold for now - but the ECB gives its strongest indication for a long while that it could take action, and soon. David Pollard reports.
Brand new euro zone notes from Germany's Bundesbank. Just out, they could be fresh, crisp symbols of a European recovery. Here though, some bleaker numbers: Greece's latest jobless figures. At over 26 per cent, they're over twice the euro zone average. The man trying to make those two economies sing in tune is Mario Draghi. He began with a familiar theme: a warning of low inflation for some time to come, and the promise of ''unconventional instruments'' to fight that, should it be necessary. And then a surprise. SOUNDBITE: Mario Draghi, ECB President, saying (English): ''I would say the governing council is comfortable with acting next time.'' It's the strongest hint for a long time that the ECB could be priming itself for a policy shift. Low inflation is certainly a concern. As is a euro which has gained four per cent against the dollar in the last six months. SOUNDBITE: Mario Draghi, ECB President, saying (English): ''The strengthening of the exchange rate in the context of low inflation is cause for serious concern.'' If Draghi were trying to talk down the euro, it worked - knocking nearly a cent and a half off the exchange rate in a few minutes. But he could risk underwhelming the markets if and when action is taken. Trevor Williams of Lloyds. SOUNDBITE: Trevor Williams, Chief Economist, Lloyds Bank, saying (English): ''Markets may well be disappointed by what they do because I think it will be seen as marginal. The sorts of things that they will be able to do in my view would be to inject more liquidity into the market, they may lower the MLR, the minimum lending rate.'' UK rates were also left on hold. With the pound at its highest against the dollar for five years, some predict the Bank of England will take a more dovish stance to help exporters. But there's a strong case for tightening - based on an accelerating housing market and signs the UK is recovering faster than its G7 peers. David Tinsley of BNP Paribas says labour costs could hold the key to the timing of a decision. SOUNDBITE:David Tinsley, Chief UK Economist, BNP Paribas, saying (English): ''As of now, our central case is they, the MPC will hold rates until the first quarter of next year and then hike. But it, you know, the outlook is vulnerable to a move earlier than that if inflation picked up and more obviously if wages did so.'' The BoE's quarterly inflation report - and a new set of growth and inflation forecasts seen as crucial in determining its next policy move - comes out next week.