It was an exercise in real time confrontation on a continental level. And also an important lesson on the European Central Bank’s much treasured independence.

As ECB president Jean Claude Trichet was giving his monthly press conference during which he announced the ECB was keeping its key interest rate unchanged, a journalist in the audience got wind of what French President Nicolas Sarkozy was saying at that moment in Paris.

Mr Sarkozy, long a critic of the ECB and its impact on the French economy, was praising the ECB decision as a small step in the right direction and somehow taking credit for it.

Hearing this from the journalist, Mr Trichet gave what must have been a long thought out response to all Mr Sarkozy’s jibes and criticism.

The ECB is independent, Mr Trichet stressed. The Treaty that set up the ECB made it really independent and it also told political leaders not to seek to influence the ECB. Those who claim otherwise are infringing Article 108 of the Maastricht Treaty.

The ECB decision was unanimous and based on the ECB’s own analysis. If the financial markets do not deem the ECB as being independent they will react otherwise.

The main ECB Governing Council decision was to keep the key ECB interest rates unchanged. The medium-term outlook for price stability remains subject to upside risks. Financial market volatility and a reappraisal of risk in recent weeks have led to an increase in uncertainty. Given this high level of uncertainty, it is appropriate to gather additional information and to examine new data before drawing further conclusions for monetary policy.

Macro-economic data, meanwhile, to which, for the first time, the data for Malta and Cyprus have been added, confirms the strong fundamentals of the euro area economy and support a favourable medium-term outlook for real GDP growth. The projections foresee average annual real GDP growth between 2.2 per cent and 2.8 per cent in 2007 and between 1.8 per cent and 2.8 per cent in 2008.

Annual inflation was 1.8 per cent in August, the same as in the previous month. Inflation rates are likely to increase again to about two per cent. ECB projections lie between 1.9 per cent and 2.1 per cent in 2007 and between 1.5 per cent and 2.5 per cent in 2008.

In conclusion, Mr Trichet emphasised the need for transparency and also for keeping one’s composure in times of stress.