Page last updated at 15:40 GMT, Thursday, 4 March 2010

Eurozone rates maintained at 1%

Euro currency logo sign in front of ECB building in Frankfurt
Interest rates are at their lowest in the ECB's 10-year history

The European Central Bank (ECB) has kept the eurozone interest rate at its record low of 1% for the 10th month in a row, as expected.

The ECB also signalled it would scale back the special lending measures introduced during the financial crisis.

ECB president Jean-Claude Trichet said that economic recovery in the euro area was "on track but will remain uneven".

Worries remain about Greece's ability to tackle its debt burden despite its announcement of new austerity plans.

But Mr Trichet dismissed suggestions that Greece could leave the euro as "an absurd hypothesis".

"As president of the ECB I am making a very positive judgement on the decisions Greece has taken, they are convincing in our eyes."

Earlier on Thursday, the Bank of England kept the UK's key interest rate on hold at 0.5%, for the 12th month in a row.

Growth forecasts

When the credit markets seized up during the financial crisis, the ECB introduced a range of cheap bank lending operations to allow banks to have access to money.

Mr Trichet said the central bank would now begin withdrawing some of the measures put in place. For instance, the bank fixed the interest rate charged for three-month loans at the benchmark rate. That will now return to a variable rate from 28 April.

Eurozone interest rates have been at 1% since May last year.

The ECB estimates that the eurozone's economy will expand by between 0.4% and 1.2% in 2010 and between 0.5% and 2.5% in 2011.

Europe's return to growth is seen as fragile, with particular concerns about Greece, Spain, Italy, Ireland and Portugal.

Separately on Thursday, Eurostat confirmed its initial estimate that the eurozone and the wider EU27 economic area had both grown by 0.1% in the final quarter of 2009.



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