The European Central Bank on Thursday cut its economic growth forecast for 2005 and 2006, blaming a downward revision in growth data for the first quarter and the impact of energy prices. The ECB now sees euro area GDP between 1% and 1.6% in 2005 and between 1.3% and 2.3% in 2006. The Frankfurt-based central bank, which as expected left interest rates at 2%, previously was looking for 1.1% to 1.7% eurozone growth in 2005 and 1.5% to 2.5% growth in 2006. "Risks to the economic growth projections continue to lie on the downside, and relate to higher oil prices, low consumer confidence and concerns about global imbalances," the bank said in its introductory statement to its monthly press conference. But the central bank also lifted inflation forecasts, now seeing HICP inflation between 2.1% and 2.3% in 2005 and between 1.4% and 2.4% in 2006. "The latest projections constitute considerable upward revisions to the Eurosystem staff inflation projections published in June, reflecting the fact that oil prices have once again increased by more than was suggested earlier by forward rates. At the same time, wage increases have remained contained over recent quarters; the projections are based on the assumption that this trend will prevail for the time being given the current labor market situation," the central bank said. The ECB previously saw inflation in 2005 between 1.8% to 2.2%, and 2006 inflation between 0.9% and 2.1%.