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Sunday 16th of January 2011
January 13, 2011    

Euro zone interest rates on hold at 1%

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by Kay Murchie

As widely expected, the European Central Bank (ECB) today elected to keep interest rates on hold at the record low of 1% for the 20th consecutive month.

Rates are expected to be kept on hold for the medium-term at least to boost the area’s economic recovery.

However, there are still fears that the debt crisis could spread to weaker economies, such as Portugal and Spain.

Today, Spain held a successful auction of Government bonds - just a day after Portugal raised £1 billion via the sale of bonds.

Both auctions have boosted investor confidence in the two countries’ ability to trim their budget deficits in accordance with EU rules.

The decision by the ECB comes shortly after the Bank of England opted to keep UK interest rates at the historic low of 0.5% - where they have been since March 2009.

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