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Last Updated: Thursday, 1 July, 2004, 12:29 GMT 13:29 UK
ECB leaves interest rates at 2%
A euro note held in front of the European Central Bank in Frankfurt, Germany
Growth in the eurozone is proving difficult to keep going
The European Central Bank (ECB) has kept interest rates at 2% amid concerns that higher borrowing costs would slow an already fragile recovery.

Recent economic data has provided a mixed picture within the eurozone, with consumer and business spending still weak and manufacturing sputtering.

By contrast, the US Federal Reserve on Wednesday moved to rein in growth and lifted rates a quarter point to 1.25%.

The Bank of England also took action recently and hinted at further hikes.

Eurozone interest rates have now been at 2% for more than a year.

But with inflation not posing much of a threat, policy makers are under less pressure to act.

"The problem, the reason they do nothing now, is the uncertainty," said Michael Schubert, an economist at Commerzbank. "They are not certain whether growth prospects in the euro area will prove to be sustainable."




SEE ALSO:
Bank 'has not changed rate view'
24 Jun 04  |  Business
Fed raises interest rate to 1.25%
30 Jun 04  |  Business
Euro interest rate left unchanged
01 Apr 04  |  Business
Schroeder calls for weaker euro
26 Feb 04  |  Business


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