ECB Leaves Key Rate at 1.5%

Spread of debt crisis to Spain and Italy increases pressure on policy makers.

The European Central Bank left interest rates unchanged as economic growth slows and the region’s debt crisis spreads to Italy and Spain, increasing pressure on policy makers to resume bond purchases.

ECB officials meeting in Frankfurt today kept the benchmark rate at 1.5 percent after lifting it by 25 basis points last month, as predicted by all 54 economists in a Bloomberg News survey. With yields on Italian and Spanish bonds near euro-era records and the economy showing signs of weakening, investors have reduced bets that the ECB will add to its two rate increases in 2011, even as some Governing Council members push for more monetary tightening to tame inflation.

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