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(CEP News) Frankfurt - Explaining the European Central Bank's reason for raising its refinancing rate to 4.25%, ECB President Jean-Claude Trichet held a press conference and emphasized that it was imperative that medium-to-long-term inflation expectations remain anchored.
Expecting protracted periods of elevated inflation levels, Trichet said that risks to price stability were "clearly on the upside and have risen further". In his speech, Trichet conceded that recent data confirmed expectations of "rather weak" GDP growth in the second quarter of 2008. However, Trichet emphasized that it was necessary to evaluate the first two quarters of the year together and added that GDP figures were broadly in line with expectations of moderate growth. Trichet also said that growth was expected to moderate, but would remain resilient thanks to emerging markets. By Todd Wailoo,
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, edited by Cristina Markham,
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