11 Jun 2010

Interest rates held by ECB and BoE

8:09 am on 11 June 2010

The European Central Bank has held eurozone interest rates at 1% for the 10th consecutive month. The decision was expected.

ECB president Jean-Claude Trichet said growth would be "moderate and uneven".

Most EU governments will introduce measures to cut budget deficits this year or in 2011.

Mr Trichet said inflation should remain moderate, but identified possible rises in VAT rates and the rising price in euros of commodities as risks.

The ECB forecasts eurozone inflation of 1.4%-1.6% for 2010, a slight upward revision from its March forecast. It also predicts growth of 0.7%-1.3% this year, also revised up.

Earlier on Thursday, the Bank of England announced that it has kept interest rates in Britain on hold at 0.5%.

The Bank also decided not to inject any more money into the economy under its policy of quantitative easing.

Interest rates have been at 0.5% since March 2009.