 ECB President Jean-Claude Trichet is struggling with stagnant growth |
The European Central Bank (ECB) has kept the cost of borrowing within the 12-nation eurozone on hold at 2%. The Frankfurt-based bank's decision comes despite growing pressure in some quarters for a cut in interest rates.
Analysts said the weaker euro and signs of improved business confidence in some eurozone countries had dented the case for a cut in rates from current lows.
Government officials in Germany, Italy and Austria had been pushing for a cut to boost their flagging economies.
'Appropriate stance'
Earlier this week, the European Parliament had rejected a report which had backed the ECB's stance on interest rates.
However, ECB President Jean-Claude Trichet said: "We have concluded that the monetary policy stance is appropriate given the outlook for price stability over the medium term."
Since the ECB's governing council last met a month ago, the euro has fallen by about 3% against the newly resurgent dollar, while oil prices have pushed above $60 a barrel.
The ECB's decision leaves eurozone interest rates at 2% for the 25th month running.
In London, the Bank of England's Monetary Policy Committee kept UK interest rates on hold at 4.75%, in line with expectations.
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