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ECB sees global growth next year
The European Central Bank (ECB) has said it expects to see growth returning to the global economy next year as it kept interest rates on hold at 1%.
The bank said that economic activity is likely to remain weak this year.
But while the outlook was uncertain, it said that there were signs the recession was "bottoming out" and that "positive growth" would return in 2010.
Eurozone interest rates are among the highest for developed economies. The Bank of England kept rates at 0.5%.
'Uncertainty'
"Economic activity over the remainder of this year is likely to remain weak, although the pace of contraction is clearly slowing down," said ECB president Jean Claude Trichet.
"While uncertainty is still high... and we have to be prepared for ongoing volatility in incoming data, there are increasing signs the global recession is bottoming out.
"Looking ahead into next year, after a phase of stabilisation, a gradual recovery with positive growth rates is expected," he added.
The ECB last cut rates in May, when they were reduced to 1% from 1.25%. It has reduced rates seven times since last October, when rates stood at 4.25%.
As part of efforts to boost business lending and spur economic growth, the central bank has also supplied cash to the banking system and previously pledged to buy 60bn euros (£50bn) of low-risk corporate bonds.
The ECB's vice president Lucas Papademos described the programme to buy bonds as "very successful".
Unemployment in the countries which share the euro is at a record high. Consumer demand is also weak, with retail sales falling in June.
source: bbc
Posted on Thursday 6th August 2009
