and our monetary policy remains accommodative

As she had largely left him there in early September, at the previous meeting of its Board of Governors, the European Central Bank (ECB) decided yesterday raise its main interest rate a quarter of a point to 3.25. The decision was taken unanimously, said its President, Jean-Claude Trichet, at the end of the meeting held exceptionally in Paris, at the headquarters of the Bank of France, the assumption of an increase of half a point having not been deemed "appropriate" (read also page 31).

After five consecutive increases, the ECB rates are at their highest level for five years. It is always because "risk rising weighing on price stability in the medium term" that monetary tightening is warranted, the statement read by Jean-Claude Trichet at the end of the meeting. Not stopped by the decrease of inflation, estimated by Eurostat to 1.8 in the euro area in September, after 2.3 in August, the Governors held that this slowdown was due to the recent decline in oil prices and thus transient. "Global inflation should start rising towards the end of the year and in early 2007", he said.

"Responsible behavior".

The institution of Frankfurt continues to predict an inflation of 2.4 in 2007 as in 2006. The risks weighing on prices remain "oriented upward" and take "to impact of the previous oil price rises on that proposed stronger consumption currently prices", and "additional increases in administered prices and indirect taxes".

The President of the ECB provides only momentary importance on the rise of three points of the TVA announced for January 1, 2007, Germany. It provides an inflationary "bump" in early 2007 combined with a slowdown in consumption in that country, but judge this "transitional" phenomenon and believes that it must be analyzed in the prospect of a resumption of growth in Europe, that he considers "stronger" than expected. "The conditions for continued growth of the economy of the euro area, at a high rate", i.e. 2, "remain met" for the end of 2006 and the 2007 year. It is much more concerned about the risks associated with "a greater than expected wage progression" in the wake of the resumption of growth and "encouraging signals from the labor markets." Therefore, calls once again, "the social partners to maintain a responsible behaviour".

Finally, on a strictly monetary level, the Governing Council confirms that liquidity are important while the credits to the private sector continue to grow at a rate of 10, which weigh a risk on the price stability in the medium term.

In total, Jean-Claude Trichet insisted, "interest rates remain low, even after operated recovery today (...), and our monetary policy remains accommodative." He added that "if our hypotheses are confirmed, the continuation of the adjustment of the accommodative orientation of monetary policy remain justified." In other words, the ECB reporting once more its interest rates, likely in December, if growth is confirmed in the third and fourth quarters. 'I will say nothing that contradicts the sense of the markets' that emphasize an increase of a quarter of a point in December, dropped Jean-Claude Trichet, refusing to discuss the strategy of the Bank beyond December 2006.