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ECB leaves rates on hold despite inflation worries

Data released on Monday showed the annual inflation rate across the eurozone dropped to 0.5 per cent in March — down from 0.7 per cent in February.

Frankfurt | Published: April 4, 2014 1:16:50 am

The European Central Bank left its main interest rate unchanged Thursday despite evidence that the economy of the 18-country eurozone is weak, with inflation continuing to fall and unemployment stuck near a record high.

The ECB’s decision to leave the rate at a record-low 0.25 per cent is certain to prompt questions about whether it might soon resort to less conventional measures to boost the economy, such as a new round of cheap loans to banks or large-scale purchases of financial assets, as the US Federal Reserve has done.

President Mario Draghi is set to discuss the ECB governing council’s policy decision later Thursday, and investors will be watching for any hints of future action.

Data released on Monday showed the annual inflation rate across the eurozone dropped to 0.5 per cent in March — down from 0.7 per cent in February.

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