"Draghi may prepare the markets for the scenario that inflation won't come down below 2 percent in 2012"
- Jens Sondergaard, chief European economist at Nomura International Plc
The European Central Bank kept rates on hold at 1.0 per cent on Thursday, pausing to assess potential inflation risks.
"Draghi may prepare the markets for the scenario that inflation won't come down below 2 percent in 2012," said Jens Sondergaard, chief European economist at Nomura International Plc in London.
"He doesn't want to signal there'll be monetary tightening, but markets shouldn't expect any more loosening from the ECB in the coming months."
In a separate report the Federal Statistical Office of Germany said industrial production rose 1.6 per cent in January, compared to the previous month.
"This is the first hard evidence of a tender rebound in the economy," said Carsten Brzeski, an economist at ING Group in Brussels.
"While next month's data may disappoint because of the harsh winter, the economy is robust enough to offset any negative impact from higher oil prices and weaker demand from other euro-zone countries."
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