Eurozone interest rates kept unchanged

Mario Draghi - ECB PresidentImage copyright
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Eurozone interest rates have been kept unchanged by the European Central Bank (ECB), as expected, with the benchmark rate remaining at 0%.

Attention now switches to ECB president Mario Draghi’s news conference, at which he will explain the decision.

Markets will be scrutinising his comments for any signs as to a change in the ECB’s stimulus policies.

The bank is currently buying 60bn euros (£53.3bn) of bonds a month as part of its quantitative easing (QE) programme.

Last month, Mr Draghi said that the ECB would continue with its bond-buying programme, adding that it would be “in the market for a long time”.

However, there has been speculation that the bank might soon begin to signal a winding down of the programme.

The bond-buying programme, together with ultra-low interest rates, was designed to fend off the threat of deflation hitting the eurozone.

That threat now seems to have receded. The inflation rate in the eurozone was 1.3% in June, although it remains below the ECB’s target of close to, but below, 2%.

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