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March 4, 2010    

Euro zone interest rates on hold at 1%

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by Kay Murchie
Euro zone interest rates on hold at 1%

The European Central Bank (ECB) today elected to keep interest rates on hold at the historic low of 1% for the tenth consecutive month, as widely expected.

Interest rates are expected to remain on hold until at least 2011, as a result of uneven growth and low inflation.

ECB President, Jean-Claude Trichet, said: “Overall, the governing council expects the euro area economy to grow at a moderate pace in 2010, in an environment marked by continued uncertainty.”

Mr Trichet said the ECB expects growth this year to be between 0.4% and 1.2%. For 2011, the Bank expects growth of 0.5% and 2.5%.

The euro zone, as a whole, has suffered in recent weeks, due to the debt crisis in Greece.

Growing fears over the debt crisis in Greece have weakened the value of the euro as Greece takes action to reduce its public deficit from 12% to 8% of GDP this year.

The country currently has the highest debt of the 16-member euro zone - at €300 billion (£259 billion).

Meanwhile, the news comes after the Bank of England elected to keep interest rates at the historic low of 0.5% - the 12th consecutive month that rates have been at this level.

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