The European Central Bank (ECB) has declined to follow the Bank of England's surprise decision to cut interest rates and has left the key borrowing rate at 2.75 per cent.
The outcome was widely expected in financial markets, although the Bank of England's action earlier today last-minute speculation the ECB might have moved.
The ECB made no further statement but its president, Dr Wim Duisenberg, is due to explain the rate decision at a news conference at 1.30 p.m. The bank last cut rates in December by half a percentage point.
ECB policymakers in recent weeks said they are confident that sluggish growth will improve later this year in the 12 euro zone countries and inflation moderate and fall below its two-per cent ceiling. But they have said the prospect of war casts uncertainty over the outlook.
Economists widely expect the ECB to lower interest rates in the coming months. But for now the ECB is more concerned to see how oil prices, hovering above $30 a barrel, fare.