Xiinhua: ECB leaves interest rates unchanged, pressure remains

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ECB leaves interest rates unchanged, pressure remains

The ECB decided on Thursday to hold its key interest rates steady at 4 percent, ignoring calls from European economic circles to follow the U.S. Federal Reserve's lead to lower rates to promote economic growth.The main pressure, which builds on the ECB to cut rates, includes the Bush administration's tax-relief plan and the U.S. Fed's monetary policy of lowering interest rates in recent months, as the U.S. central bank has reduced rates five times since September to the current 3 percent in a bid to stimulate the economy.

Note EU-Digest: The ECB is correct in not following the US example of interest rate cuts given that the EU economic picture is totally different from that of the US. Following the US pattern of rate cuts would only increase inflation in Europe which has been on the rise.