ECB keeps key interest rates unchanged

The European Central Bank (ECB) has left interest rates on hold today and revised downwards its growth projections for this year and next.

The bank's Governing Council made a unanimous decision to keep its key lending rate at 1.5%, influenced by the new growth projections and continued uncertainty on the global money markets.

Analysts now say the economic outlook for the eurozone could lead to an actual cut in interest rates towards year end or early new year.

ECB President Jean Claude Trichet didn't make any comment on that during a press conference today, but admitted the situation in the Eurozone is changing rapidly.

"Looking ahead, we expect the euro area economy to grow moderately, subject to particularly high uncertainty and intensified downside risks," Mr Trichet said..

"At the same time, short-term interest rates are low. While our monetary policy stance remains accommodative, some financing conditions have tightened.

"It remains essential for monetary policy to focus on its mandate of maintaining price stability over the medium term, thereby ensuring that recent price developments do not give rise to broad-based inflationary pressures.

"We will continue to monitor very closely all developments."