Analysts expect eurozone interest rates to be left firmly on hold at 1.0 percent this Thursday. The rate has been at a record low since May and is likely to remain at this level amid ongoing concerns about the strength of the economic recovery.
As expected by the European Commission, Europe's economy will shrink by 4 percent in 2009. But the Eurozone is predicted to climb out of recession in the third quarter, despite rising unemployment and strained government finances.
The unemployment in the 16-nation Eurozone stood at 9.5 % in July as latest figures showed that 15.09 million people were without a job - figures last seen in May 1999. Figures for the EU bloc as a whole were at 9 percent.
Despite tighter lending conditions and fears of deflation, the European Central Bank (ECB) kept its main interest rate unchanged at a record low of one percent on Thursday. The Bank of England also left its key rate unchanged at 0.5 percent.
The jobless rate across the EU rose to 9.4 percent in June, its highest level since September 1999. Seasonally adjusted unemployment stood at 9.4 percent, up from 9.3 percent in May, the Eurostat data agency said.
Seeking to spur bank lending and pull continental economies out of recession, the European Central Bank has poured 442 billion euros ($613 billion) into money markets via the offer of one-year funds, its biggest ever fund injection.
The European Central Bank (ECB) warned on Thursday that the Eurozone economy would contract 4.6 percent this year, much more than previously feared. Its interest rates is being kept at a record low of 1.0 percent.
The European Central Bank (ECB) is poised to keep interest rates at a record low of 1.0 percent. Given the Eurozone's economic recession, economists expect the ECB to restrict its key rates well into 2010.
Luxembourg's PM Jean-Claude Juncker announced he would likely pass the national finance ministry to a party colleague, a move that would require him to give up the post of Eurogroup chairman he has held since 2005.
