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ECB keeps interest rates unchanged ECB promises more action to boost economy if needed
(35 minutes later)
The European Central Bank has kept its benchmark interest rate unchanged at the record low of 0.05%. The president of the European Central Bank (ECB), Mario Draghi, says the bank stands ready to give the eurozone further economic stimulus "should it become necessary".
The bank began an asset purchase programme last month, but has come under pressure to do more to boost weak economic growth in the eurozone.The bank began an asset purchase programme last month, but has come under pressure to do more to boost weak economic growth in the eurozone.
His pledge boosted shares in Europe.
The ECB's regular policy meeting left interest rates unchanged at their record low of 0.05%, as expected.
On Tuesday, the European Commission cuts its growth forecast for the eurozone.On Tuesday, the European Commission cuts its growth forecast for the eurozone.
It now expects the eurozone to grow by just 0.8% this year, down from a previous estimate of 1.2%.It now expects the eurozone to grow by just 0.8% this year, down from a previous estimate of 1.2%.
The commission also cut its growth forecast for 2015 to 1.1% from 1.7%.The commission also cut its growth forecast for 2015 to 1.1% from 1.7%.
Comments by ECB president Mario Draghi at a press conference, currently underway, are being scrutinised for any hints of future action by the bank. Mr Draghi said: "Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate."
The president gave a broad pledge that further action would be taken if necessary: "The Governing Council has tasked ECB staff and the relevant Eurosystem committees with ensuring the timely preparation of further measures to be implemented, if needed."
RecoveryRecovery
In September, the bank's head Mario Draghi announced an asset buying programme, although not a quantitative easing (QE) programme, which involves buying government debt - something that is hugely controversial within the eurozone and fiercely opposed by powerful Germany. In September, the bank's head Mario Draghi announced an asset buying programme, although not a quantitative easing (QE) programme, which involves buying mainly government debt - something that is hugely controversial within the eurozone and fiercely opposed by powerful Germany.
Its attempt to kick some life into the sluggish eurozone economy is to buy covered bonds and other assets for two years.Its attempt to kick some life into the sluggish eurozone economy is to buy covered bonds and other assets for two years.
Covered bonds are those backed by public sector loans or mortgages.Covered bonds are those backed by public sector loans or mortgages.
Many economists do not think this will be enough to promote economic recovery and there is pressure on Mr Draghi to come up with more.Many economists do not think this will be enough to promote economic recovery and there is pressure on Mr Draghi to come up with more.
Next month the ECB will give its latest forecasts for the eurozone area. Its most recent, given in September, forecast growth of 0.9 percent this year and 1.6 percent in 2015. Next month the ECB will give its latest forecasts for the eurozone area. Its most recent, given in September, forecast growth of 0.9% this year and 1.6% in 2015.