ECB leaves interest rates unchanged

The Governing Council of the ECB today left its key interest rates unchanged, as had been widely expected.

The main lending rate remains at an historic low of 1%.

In a statement the ECB said it had decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 1.00%, 1.75% and 0.25% respectively.

The decision follows an earlier announcement from the Bank of England which also left UK interest rates static at 0.5%.

ECB President Jean Claude Trichet speaking at a press conference in Brussels said the current rates remain appropriate.

"We continue to expect price developments to remain moderate over the policy-relevant medium-term horizon," Mr Trichet said.

"Global inflationary pressures may persist, while domestic price pressures are expected to remain low.

"Looking ahead, we expect the euro area economy to grow at a moderate pace, in an environment of continued tensions in some financial market segments and of unusually high uncertainty."

Mr Trichet however revised growth projections for the Eurozone, predicting GDP growth of 1% this year, up from the March estimate of 0.8%.

For 2011 however projections were revised downwards, to 1.2% from 1.5%.

The ECB also welcomed the recent decision by euro area countries to formally establish a European Financial Stability Facility.

"The Governing Council welcomes the fact that a number of euro area governments with the highest deficits and strongly increasing debt levels have adopted additional fiscal consolidation measures and set out more ambitious fiscal targets," Mr Trichet added.