ECB Holds Rates to Assess Inflation, Growth Risks

The European Central Bank held its main interest rate at a record low of 0.75% on Thursday, waiting to see whether inflation and the euro zone economy slow further before deciding on any fresh cut in borrowing costs. Euro zone inflation held steady at 2.4% in July -just above the ECB's target of close to but below 2%.

After the decision, the euro rose against the U.S. dollar to $1.2285 from $1.2264 before, while European shares pared gains. The ECB also left the interest rate on its deposit facility at 0.0% - a low it went to for the first time last month to encourage banks to lend overnight to other banks, where they receive a higher rate, currently about 0.1%. The ECB held its marginal lending facility - or emergency borrowing rate - at 1.50%.

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