ECB holds rates at 1%

by Richard Kilner

Story link: ECB holds rates at 1%

The Governing Council of the European Central Bank (ECB) has elected to retain the eurozone’s interest rate at 1%.

The decision means that the rate has been at the same level, a historic low, for a year.

The euro has recently been involved in the headlines due to the substantial economic difficulties the Greek economy has found itself in.

Due to the single currency Greece has been unable to devalue its currency (formerly the drachma), exacerbating the economic woes it is facing.

Other European countries that may be facing the prospect of huge economic turmoil and austerity measures include Portugal and Spain.

Yesterday credit ratings agency Moody’s warned that British banks are at risk from the Greek crisis, adding that the banks of Portugal, Spain, Italy and Ireland are also potentially at risk.