Food prices can potentially lead to wage demands which, given the stickiness of this component of the cost structure of the private sector, would result in subsequent increases in general level. However the risk is more evident in emerging countries than in developed  4  BIS Review 28/2008  ones.
We will now report on the outcome of today’s meeting of the Governing Council. On the basis of our regular economic and monetary analyses, we decided at today’s meeting to leave the key ECB interest rates unchanged. The information that has become available since our previous meeting has further underpinned the reasoning behind our decision to increase interest rates in July.