LONDON (MarketWatch) -- Inflation pressures in the euro zone have diminished "somewhat" and downside economic risks have increased, European Central Bank President Jean-Claude Trichet said Thursday, following the central bank's decision to leave its key lending rate unchanged at 4.25%. Trichet warned, however, that inflation was likely to remain elevated for some time and noted that wage growth has been picking up despite weaker economic activity and declining labor productivity. Trichet repeated that broad-based "second round" inflation effects must be avoided, and said the ECB's Governing Council was paying particular attention to wage talks in the euro zone.
