Eurozone interest rates unchanged

Interest rates are at their lowest in the ECB's 10-year history

The European Central Bank (ECB) has kept interest rates on hold at a record low of 1% for the sixth month in a row.

Earlier on Thursday figures showed that retail sales in the 16 countries that use the euro fell by 0.7% in September.

The drop came as rising unemployment and financial uncertainty continue to drag on consumer confidence.

Data this week showed unemployment levels across the 16 states that use the euro rose to 9.7% in September, the highest rate since January 1999.

Decision 'a given'

The ECB began cutting rates in October 2008, taking them from 4.25% to their current record low in May.

It has also provided unlimited loans to commercial banks in a bid to boost credit.

"Rates on hold was a given," said Unicredit economist Marco Valli.

On Wednesday, the Federal Reserve kept US interest rates on hold at between 0% and 0.25%.

The Bank of England also kept UK interest rates on hold at 0.5% earlier on Thursday.

'High uncertainty'

After the rates announcement was made the president of the European Central Bank, Jean-Claude Trichet, predicted the eurozone economy would recover gradually in 2010.

"The latest information continues to signal an improvement in economic activity in the second half of this year," he said.

"The [bank] Governing Council expects the euro economy in 2010 to recover at a gradual pace, recognising that the outlook remains subject to high uncertainty."

Next week, the release of third quarter eurozone economic growth figures are expected to show the bloc exited recession, growing by around 0.5% from the second quarter.

And he said in the coming months, annual inflation rates - which are currently negative in the eurozone area - are projected to turn positive again.