next year's growth will be weaker than expected, keeping ECB interest rates on hold until mid-2004 unless the outlook weakens and it has to cut again. "Activity is likely to remain subdued in 2003, but could accelerate to potential of some two percent in 2004," the Paris-based Organisation for Economic Cooperation and Development said in a special survey of the currency bloc. The OECD had forecast 2.4 percent 2004 growth in its April Economic Outlook. "Hence, with the exchange rate assumed to remain strong the OECD assumes the European Central bank to keep its policy rate on hold after a series of cuts in the spring of 2003 until mid-2004," it said. But the OECD added that the recovery faced a number of potential obstacles, including a weaker than expected rebound in the United States and disappointing internal demand, and that the bank ought be prepared to cut again if the outlook darkened. "If evidence of further weakening of economic activity surfaces, moderating inflation pressures further, the ECB should stand ready to reduce its key interest rates again," it said. The ECB governing council met in Frankfurt on Thursday to review policy and was expected to announce it had left rates unchanged at two percent, their lowest level in the history of the monetary union, in a statement at 1145 GMT. The OECD said that euro zone inflation would ease to 1-1/2 percent in 2004, while unemployment would peak this year.