European Central Bank seen holding rates steady



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FRANKFURT, Germany (AP) — The European Central Bank is expected to keep its main interest rate on hold at a record low of 0.25 percent at its monthly meeting Thursday.

The central bank for the eurozone's 18 countries is likely to be encouraged by recent upbeat economic indicators and stabilization in the inflation rate.

Investors will pay close attention to new economic forecasts by the ECB, in particular its inflation expectations. Some economists worry the eurozone might fall into deflation, a sustained drop in prices that can choke growth, though the ECB has said it doesn't expect that.

Tom Rogers, senior economic adviser to EY, expects "the ECB will continue to underline it has options for further easing, but hold off using them unless the recovery takes a turn for the worse."

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The Associated Press

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