, in particular the slowdown in the euro area economy is a cause for concern. in conclusion, taking the latest available evidence into account, at today ’ s meeting the governing council confirmed its assessment regarding the outlook for price developments. the governing council therefore decided to keep ecb interest rates unchanged at the levels currently prevailing. i should now like to inform you about some other matters considered today. the auction technique for the longer - term refinancing operations was reviewed by the governing council today. in its first two longer - term refinancing operations ( settled on 14 january and 25 february 1999 ), which are as a rule conducted by means of variable rate tenders, the eurosystem applied the single rate ( “ dutch ” ) method of allotment. the single rate method was chosen in order to encourage less experienced counterparties to participate in the tender. the governing council takes the view that all interested counterparties should by now be sufficiently accustomed to the longerterm refinancing operation also to be in a position to participate in this type of operation under the more market - oriented multiple rate ( “ american ” ) method of allotment. against this background, the governing council has decided that the multiple rate method of allotment will be applied starting from the next longer - term refinancing operation ( to be settled on 25 march 1999 ), until otherwise indicated. finally, let me inform you that the general council today discussed the monetary policies of the central banks of the non - participating member states against the background of the monetary policy set by the eurosystem. as you will know, the general council has taken over those tasks of the european monetary institute ( emi ) which still have to be performed during stage three because of the derogations of some member states. one of these tasks relates to strengthening the co - ordination of the monetary policies in the community with the aim of ensuring price stability. the general council intends to conduct these co - ordination exercises biannually in future.

% compared with the previous quarter. these developments broadly confirm the pattern observed earlier in industrial confidence, which was on a declining trend in the second half of 1998. the latest data on industrial confidence in the euro area, i. e. those released by the european commission today, indicate that industrial confidence has weakened further. some recent wage developments in the euro area might have contributed to that. the level of unemployment has remained more or less unchanged over the past four months. finally, consumer confidence in the euro area has remained unchanged from the high levels seen at the beginning of the year. with regard to capacity utilisation in the manufacturing sector, which fell further in the fourth quarter of 1998, and retail sales, which up to november 1998 pointed towards broadly sustained growth, no new data are yet available. overall, with regard to the cyclical situation, recent data confirm our earlier expectations that there are still downside risks for output growth. the governing council will continue its thorough analysis and very close monitoring of underlying trends and review its broad outlook for the euro area accordingly on an ongoing basis, taking into account in a forward - looking manner the impact of both domestic and external developments. with regard to the latest data on the harmonised index of consumer prices ( hicp ), the annual increase for january 1999 was 0. 8 %, which is unchanged compared with the previous two months ( taking account of the most recent revisions ). looking at a breakdown of the hicp, a slight decline in the rate of increase in service prices ( from 1. 9 % in december 1998 to 1. 8 % in january 1999 ) was offset by a slight increase in goods prices ( from 0. 1 % to 0. 2 % ). the fall in the rate of change in services prices was mainly due to lower price increases for transport and communications ; this may have been a reflection of increased competition in these sectors. on the other hand, downward pressure from energy prices on goods prices diminished somewhat. on balance, the current data continue to suggest that there are no significant upward or downward pressures on prices in the short term. the pattern of risks to price stability has also remained broadly unchanged on balance. on the upward side, wage developments are a matter of concern, as would be any loosening of fiscal policies and the implications of this for achieving the objectives laid down in the stability and growth pact. in addition, recent exchange rate trends need to be monitored closely also in terms of their impact on prices. concerning downward risks