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Europe leaves interest rates unchanged, cuts growth forecast

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London:The European Central Bank left interest rates unchanged as expected on Thursday and signalled an early end to its last remaining bond purchase scheme, which helped support the euro.

It was the second time in a row the central bank has held rates, following a run of historic hikes to tame runaway price rises.After Thursday’s decision, the ECB’s deposit rate stays at a record-high 4 per cent. It was at a negative 0.5 per centonly in July 2022.

ECB also cut its growth forecasts for this year and next, as the impact of higher interest rates takes its toll on the eurozone. Growth is expected to come in at 0.6 percent this year, down from a previous forecast of 0.7 percent, the bank said. For 2024, the figure was 0.8 percent, down from 1.0 percent.

The euro held on to the day’s gains, showing little initial reaction to the ECB decision, while German 10-year bond yields, the benchmark for the wider euro zone sovereign debt market, held mostly unchanged.

Global stocks and bond prices had already shot higher, after the U.S. Federal Reserve left rates unchanged the day before and indicated monetary policy tightening was likely over.

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