The European Central Bank kept its main interest rate at a record low of 1%, as an audit of Greece noted 'considerable progress' in its public debt crisis. The ECB also kept two other benchmark rates, the marginal lending rate and the deposit rate, unchanged at 1.75% and 0.25%. In London, the Bank of England kept its benchmark interest rate at 0.5% - also a record low level - despite a recent upturn in economic growth there. The ECB released a statement along with the European Commission and the International Monetary Fund which said a Greek government plan to cut its deficit and debt had made 'considerable progress in a vast array of areas'.
The statement added that 'important reforms are ahead of schedule' but warned that 'important challenges and risks remain' in Athens' struggle to straighten out its finances which sparked a euro zone crisis this year.
ECB president Jean-Claude Trichet was sure to face questions on the situation in Greece at a press briefing that follows the rate decision. It came as euro zone growth has picked up, tension on financial markets has eased and most major European banks passed stress tests aimed at determining if they could withstand another slowdown and losses on loans and government bonds.
Inflation across the euro zone stands at 1.7%, near the ECB's target of below but close to 2%. Exceptional measures taken by the bank such as the unlimited provision of cash to commercial banks and even the controversial purchases of government bonds were not expected to be withdrawn for now.