The European Central Bank (ECB) has kept its benchmark interest rate at a record low of 0.25%.
It comes despite the fact that inflation in the currency bloc fell to a five year low in March.
Eurozone interest rates have remained unchanged since November 2013, when the bank said it expected “a prolonged period of low inflation”.
This week figures showed inflation continued to fall in March to 0.5%, well below the ECB’s target of 2%.
March was the 6th month that inflation in the eurzone was trapped in what ECB President Mario Draghi has called “the danger zone” below 1%.
It was also the third month in row in which inflation fell.
The fear attached to lower inflation is it could harm the eurozone’s nascent economic recovery, weakening consumer demand for goods and services as household’s put off spending believing prices will continue to fall.
Low inflation also means that governments and businesses find it more difficult to repay their debts.
