The European Central Bank (ECB) this afternoon left interest rates across the eurozone unchanged. The expected decision by the governing council to leave lending costs at 2.75pc follows a 50 basis point cut by the bank last month. Meanwhile, the European Commission, which has warned that the eurozone economy could contract in the current quarter, this morning tweaked its forecasts slightly. It raised its forecast for first quarter GDP growth to a range of minus 0.1pc to plus 0.3pc from an earlier range of minus 0.2pc to plus 0.2pc, but cut its forecast for Q4 2002 to growth of 0.1-0.4pc from 0.2-0.5pc.
"Although the start of the year is likely to be weak in the euro area, it remains compatible with the baseline scenario of a gradual recovery in the course of 2003," the Commission added. ECB president Wim Duisenberg will hold a press conference to explain today's decision at 1330 this afternoon. //www.fxcentre.com