Eurozone interest rates kept on hold at 0.75%

 

 Rates have been at 0.75% since July

 

 

The European Central Bank (ECB) has left eurozone interest rates unchanged at 0.75%, as had been widely expected.

Many analysts do not expect the ECB to alter rates from their current record low until next year at the earliest.
ECB president Mario Draghi told a news conference that business confidence was returning, but the situation "remains fragile".
The last time the ECB made a change to its main interest rate was in July, when it was cut from 1%.
Recent surveys have suggested that the pace of decline in the eurozone's manufacturing and service sectors has slowed.

Mr Draghi said that there were signs that business and financial confidence in the eurozone was returning, although there "continues to be downside risks".
The increasing amount of loans that European banks are repaying to the ECB was a sign of that confidence, he said. "It means they (banks) are less uncertain than they were a year ago."
Two weeks ago, the ECB said that some of the banks that received billions in cheap loans to keep them afloat during the debt crisis would repay 137.16bn euros (£117bn) of money they had borrowed.
In December 2011 and February 2012, the ECB provided a total of more than 1 trillion euros of low-interest loans to 800 banks across the European Union.

Mr Draghi also told the news conference that the appreciation of the euro currency, a growing worry for industry, was another a sign of confidence. However, the euro's strength carries inflation risks and will also make exports more expensive, so the ECB will continue "to monitor" the euro's appreciation.
He said: "The economic weakness in the euro area is expected to prevail in the early part of 2013. Later, in 2013, economic activity should gradually recover supported by our accommodative monetary policy stance, the improvement in financial market confidence and reduced fragmentation, as well as a strengthening of global demand."
The UK's Bank of England also announced on Thursday that it would be keeping its main interest rate on hold at 0.5%.

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