Bonds

LONDON (ShareCast) - There weren't any surprises at the European Central Bank's meeting in Luxembourg today as interest rates were left unchanged at 1%.

The move was widely expected so investors mulled over Jean-Claude Trichet's comments. Trichet suggested interest rates will remain at a record low for the coming months.

"The current rates are appropriate," Trichet said at the press conference after the ECB decision. But he refused to rule out further cuts: "We did not decide today that this was the lowest level we would attain under any circumstances."

Policymakers gathered in Luxembourg today for one of the two meetings a year that it holds outside Frankfurt, Germany.

Elsewhere in the eurozone, official figures showed that unemployment rose to a 10-year high of 9.5% in May from 9.3% in the previous month as another 273,000 people lost their jobs in the period.

"The further sharp rise in Eurozone unemployment in May maintains concerns about the strength of future consumer spending, while the producer price data highlight the current lack of inflationary pressures," said Howard Archer, chief UK economist at IHS Global Insight.

"This reinforces belief that the ECB should keep an open mind about taking further action to support economic activity should there be any faltering in the current signs that the rate of Eurozone economic contraction is slowing substantially or if banks fail to step up their lending to businesses and consumers."

In other economic news, producer prices in the 16-country zone fell 0.2% month-on-month in May and 5.8% on the year.