ECB keeps rates on hold at 2.75%

The European Central Bank held its key interest rate at 2.75 per cent today.

The European Central Bank held its key interest rate at 2.75 per cent today.

The decision leaves markets anxious for ECB guidance on whether it will speed up its pace of gradual hikes or wait until late August before moving.

Developments in the euro zone economy mean the ECB will continue the rate rises it began in December, but the question is when.

Manufacturing and services activity grew at their strongest rate in six years in June, adding to evidence that the economy could be enjoying its best year since 2000.

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At the same time, price pressures from high energy costs, excess liquidity and more workers finding jobs confirm the ECB's view that interest rates which are barely higher than inflation are not appropriate and must rise further.