The European Central Bank (ECB) kept its benchmark interest rate at 4 per cent for the fourth month running today.
The ECB also left its marginal lending rate unchanged at 5 per cent and its deposit facility rate unchanged at 3 per cent.
Economists had predicted rates would remain unchanged due to investors' nervousness and evidence that turmoil on financial markets is curbing economic growth.
The euro has also hit record highs against the dollar and a basket of major trading currencies. This has further clouded the growth outlook but helped to keep a lid on the soaring cost of crude oil, which is priced in the US currency.
The focus is now on a news conference by ECB President Jean-Claude Trichet in Vienna later this afternoon, where the governing council held one of its two meetings a year outside the bank's Frankfurt headquarters.
Economists hope to learn more then about the ECB's view of how the US subprime mortgage crisis is affecting Europe's economy and money markets, and whether downside risks to growth have increased.
Early indicators show the market turmoil has hit both economic activity and confidence. Growth in the manufacturing and services sectors slid to its lowest in two years in September, and economic sentiment is the weakest in more than a year.
But at the same time, inflation rose above the ECB's 2 per cent ceiling in September and is expected to accelerate further in the next few months due to the soaring food and oil prices. Crude costs have hit record highs above $80 per barrel.