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ECB holds interest rates steady

ECB holds interest rates steady
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As expected, the European Central Bank has kept the cost of borrowing unchanged.

Its main interest rate remains at a record low of three quarters of one percent

The decision not to cut comes as the eurozone economy shows some signs of stabilising leading to hopes that the worst of the downturn may have passed.

Improving business morale – as shown by new surveys of companies – has eased the pressure on the ECB President Mario Draghi and his policymakers.

Inflation meanwhile remains above the Bank’s target.

It has been over two percent for more than two years, which makes a cut difficult to justify.
“This is not a surprise given some of the recent comments from the board, which did seem to play down the recent focus on interest rates,” Nomura economist Nick Matthews said.

The euro rose slightly against the US dollar after the decision.