The European Central Bank left its key interest rate unchanged at 2 percent on Thursday as expected, balancing the risk of future inflationary pressures against shaky business and consumer confidence.
Market analysts are looking for ECB President Jean-Claude Trichet to give some clues about the timing of a rate rise when he holds a news conference at 1230 GMT to explain the thinking behind the ECB Governing Council's decision.
Trichet is expected to stress his vigilance on inflation, but whether he dwells on positive signs or negative economic data may indicate how soon the ECB plans to raise rates.
Mixed reports in recent weeks have left analysts wondering whether a rate rise would be delayed. All 62 analysts polled by Reuters last week expected the ECB to leave rates unchanged this month. The third quarter of 2005 is the most frequently predicted time for a rise, although a significant number of analysts believe it will be later.
The euro zone's official interest rates have been at a historic 2 percent low since June 2003, and ECB policymakers are concerned that this loose monetary policy is spurring credit and money supply growth, raising inflation risks down the road.
But euro zone economic growth is still fragile, and a premature rate hike could derail shaky business and consumer confidence.
Growth in euro zone manufacturing virtually stagnated in March and the European Commission's economic sentiment indicator took a surprise tumble, although the most recent retail sales figures were better than expected. But the largest euro zone economy, Germany, is faring badly with industrial output in February posting its largest decline in two years.
The ECB's decision leaves the benchmark main refinancing rate at 2.00 percent for the 22nd month in a row, the marginal lending facility used for emergency lending to banks at 3.00 percent and its deposit facility at 1.00 percent.