The European Central Bank kept interest rates at a historic low of 2 percent on Wednesday, giving a relatively gloomy short-term outlook for the euro zone economy, but effectively ruling out an interest rate cut. ECB President Jean-Claude Trichet said there was little evidence that high oil prices were pushing up inflation significantly, but they were hurting economic growth. However, speaking at a news conference after the ECB Governing Council left rates unchanged for the 23rd month running, Trichet rejected any speculation of a rate cut. "We are certainly not preparing, madam, for any rate cut, not at all," he told a questioner. "Recent data and survey indicators are, on balance, on the downside," he said. "Some of the downward risks to economic growth identified earlier, in particular those related to persistently high oil prices, appear to have partially materialised over the past few months." Analysts say that low morale among businesses and consumers, high unemployment and stuttering manufacturing activity have cast fresh doubt over the euro zone's lacklustre economic recovery. But Trichet seemed optimistic the euro zone could overcome its current problems. "When looking beyond the short term, conditions remain in place for stronger real GDP growth," he said. Inflation remained under control despite costly oil. "We continue to see no significant evidence of a build-up of underlying domestic inflationary pressures in the euro area," he said, adding that the ECB would keep up its vigilance on price risks. Interest rate futures markets fell after Trichet ruled out the possibility of rate cuts. "While a rate cut is not (fully) factored in by the market, the fact that Trichet is ruling it out is weighing a bit on the European rate markets," said National Australia Bank economist Chris Bernie. The worsening outlook had already had money markets ruling out an ECB rate rise this year, and they were even beginning to consider the prospect of a rate cut.