The European Central Bank (ECB) left interest rates unchanged as expected today amid uncertainty about the pace of the euro zone economic recovery and its inflation outlook.
The bank said in a statement it had left its key refinancing rate at 3.25 per cent, unchanged since last November. Economists had expected steady rates with a majority predicting a rate rise by the end of the year.
The statement gave no details, but ECB president Mr Wim Duisenberg will explain the decision in a news conference at 1.30 p.m.
The decision coincided with the release of a major survey showing euro zone manufacturing grew for the first time in more than a year in April.
But doubts remain over the strength of the upturn on both sides of the Atlantic, and strike threats in Germany and a recent sharp rise in oil prices threaten the ECB's aim to bring inflation sustainably below its 2 per cent ceiling.
But this week's rise of the euro to six-month highs against the dollar, if sustained, would help easing price pressures by making imported oil and other goods cheaper.