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Thursday, 12 September, 2002, 12:44 GMT 13:44 UK
No change for Euro interest rates
Euro coins and notes
Inflation is still the big problem, the ECB says
Interest rates across the 12-nation Eurozone are staying at 3.25% for the 11th month in a row.

The decision from the European Central Bank, announced on Thursday at the first policy meeting following the month-long summer break, is in line with expectations.

The Bank has yet to comment on its reasons, but the standstill is in line with recent comments from its president, Wim Duisenberg, that inflation remains too high in many Eurozone countries.

The ECB's rules, not to mention its own preference, focus on inflation over and above economic growth and employment, which are feeble across most of the zone.

Governments, meanwhile, are incapable of providing their own growth stimulus, because many of the most troubled have levels of borrowing dangerously close to the levels laid down in Europe's Stability and Growth Pact.

Pushing for a cut

The lack of surprise at the decision was reflected by the foreign exchange market, where the euro barely budged in value against the dollar.

But the constituency pushing for a rate cut is vocal.

Proponents point to a string of negative economic data - particularly from the Eurozone's biggest economy, Germany.

In addition, European companies are still warning that their outlook remains cloudy.

Philips, for example, said on Wednesday that its revenues are likely to drop 13-15% in the current quarter.

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