9 Sep 2011

ECB rate held

7:06 am on 9 September 2011

The European Central Bank has left interest rates unchanged amid the continuing debt crisis in the eurozone.

Benchmark rates were kept at 1.5% for the second month, after being raised from 1.25% in July in an attempt to cool inflation.

The ECB has also cut its growth forecasts for the eurozone economy.

The BBC reports it now expects expansion of 1.6% this year and 1.3% in 2012. Previously it predicted the economy would grow 1.7% in 2011 and 1.9% next year.

ECB president Jean-Claude Trichet said factors that were slowing growth included ''ongoing tensions'' over the high levels of sovereign debt in the eurozone, falls in business confidence, and the weakening of the global economy.

Expectations have grown that the ECB may soon have to cut rates if the debt crisis continues and the eurozone dips back into recession.

After weeks of resisting the move, the ECB has been buying Italian and Spanish bonds.