European rates expected to be left alone

Economists expect the European Central Bank to leave interest rates unchanged later today as the bank keeps a cautious eye on…

Economists expect the European Central Bank to leave interest rates unchanged later today as the bank keeps a cautious eye on prospects for growth and the potential impact of higher oil prices on the economy.

Bank officials haven't dropped any of the hints that would precede a rate move, and all 40 economists surveyed by Dow Jones Newswires predicted no action on interest rates when the bank's 18-member governing council meets at its headquarters in Frankfurt.

That would make it a full year since the last change in the bank's key refinancing rate, which has stood at 2 per cent since a half-point cut in June 2003.

The bank faces mixed economic signals, with the rising price of oil and shaky consumer confidence raising worries while other indicators appear to confirm the view that the economy will show a significant improvement this year over last year's sluggish 0.4 per cent growth rate.