ECB growth, inflation talk suggests rates on hold

Inflation risks in the euro zone are broadly balanced, European Central Bank President Jean-Claude Trichet said on Thursday, cementing expectations that interest rate rises are now on the backburner.

Trichet also flagged slow growth ahead for the currency bloc and said even that was uncertain.

"We expect the euro area economy to grow moderately, subject to particularly high uncertainty and intensified downside risks," Trichet told a news conference after the ECB left rates at 1.5%, following hikes in April and June.

Inflation should fall below 2% in 2012, Trichet said, and price risks were "broadly balanced".

That assessment marked a change from last month, when he said there were "upside risks to price stability". The change in the ECB's inflation view suggests it has abandoned its policy tightening course and that interest rates are now on hold.

"A very thorough analysis of all incoming data and developments over the period ahead is warranted," Trichet said. "We will continue to monitor very closely all developments."