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European Central Bank sees weak economic activity in Eurozone

Business Materials 5 February 2009 19:26 (UTC +04:00)

Azerbaijan, Baku, Feb. 5 / Trend , A.Badalova/

Economic activity in Eurozone will be weak in the coming quarter, European Central Bank (ECB) head Jean-Claude Trichet said on Feb. 5.

"Business activity is decreasing in Eurozone, like elsewhere worldwide. Decreasing exports from Eurozone and falling confidence index have a negative impact on the region's economy as a whole," Trichet said at a news conference in Frankfurt-am-Main broadcast live on the Vesti TV.

At today's meeting, the ECB decided to leave the key refinancing rate unchanged at two percent. Earlier, the Bank of England cut interest rate by 50 basis points to one percent a year.

Since October 2008, the ECB has lowered the base interest rate by 2.25 percentage points. At the last meeting in January, the key ECB interest rate was cut by 0.5 percentage points to two percent.

The expected further decline in prices on energy will influence the rate of inflation, Trichet said.

According to Eurostat, Eurozone experienced a 1.1-percent rise in inflation in January 2009 from January 2008. This figure is a minimal rise in 1999. Last December, inflation rate hit 1.6 percent.

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