ECB keeps rates at 2 percent
The European Central bank decided on Wednesday to keep its main interest rate at 2 percent for the twenty-third straight month in a row.
Analysts suspect that the weak economy will mean that interest rates will probably remain the same until at least autumn.
In the eurozone growth is weak and unemployment is rising, while consumer confidence is low. At the same time, inflation rates remain under control.
The European Commission has already revised earlier 2005 growth estimates in the eurozone. The current estimate for 1.6 percent growth is down from 2 percent.
The Commission put the blame for the revision on high oil prices and the strength of the euro. Additionally, German’s six top economic institutes changed their growth estimates for 2005, revising them down to 0.7 percent from an earlier estimate of 1.5 percent.
Although some members of the ECB’s governing council are believed to be in favor of raising interest rates, the current unfavorable economic conditions make such an action unwise at the present time.
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