A stronger than forecast US inflation figure caused a stir as European Central Bank rate-setters sat down for dinner on Wednesday — but several attendees said it only toughened their resolve to disregard what the Federal Reserve might do.
The ECB, which on Thursday decided to keep its benchmark deposit rate at an all-time high of 4 per cent while signalling a cut was likely in June, is grappling with intensifying questions about how much it would cut borrowing costs if the Fed took a different path.
US data on Wednesday showed a 3.5 per cent rise in consumer prices for the year to March, compared with expectations of 3.4 per cent. The third successive month of above-forecast inflation prompted traders to bet US rate cuts might undershoot expectations and not begin until November.