ECB holds interest rate at historic low of 1%

THE European Central Bank (ECB) left borrowing rates unchanged at their historic low of 1% following its monthly meeting in Frankfurt yesterday.

That decision was in line with expectations. And the markets have already anticipated that there will be no change in rates in 2010 due to the depressed state of the eurozone economy and the absence of any inflationary pressures.

Commenting on the interest rate outlook, Bank of Ireland chief economist Dan McLaughlin said the pace of recovery removes any pressure on the ECB to raise the cost of borrowing for some time.