Euro interest rate left unchanged

The ECB is responsible for monetary policy in the eurozone

The European Central Bank (ECB) has decided to keep interest rates on hold at 2%, despite some calls for a cut to help boost the slow recovery.

The move had been widely expected with the latest economic data showing manufacturing orders and output rising at their fastest pace since 2000.

Prospects for exporters have also improved with the euro weakening against the dollar since February.

However, other reports say consumer confidence in the eurozone remains low.

Eurozone interest rates have now been at 2% for 11 months.

The announcement, which had been widely flagged by ECB policy makers, was largely ignored by the financial markets.

The ECB's rejection of calls for a cut came at the same time as the Bank of England raised its rates by a quarter percentage point.

And instead of a future cut, many analysts now believe the ECB will follow the global upward trend away from cheap borrowing and actually raise rates as early as September.

"I think that it will be more and more difficult for the ECB to justify (a cut), so probably the door will still be left open but it will be very tight," said Olivier Gasnier, senior economist at Societe Generale in Paris.