European Central Bank not to change interest rate

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European Central Bank's seat. File Photo: EFE

The European Central Bank is expected to keep its key interest rate unchanged this week to fight lingering inflation despite the world financial crisis and the spreading U.S. financial meltdown, but analysts say the Bank of England could move its benchmark rate lower when it meets next week in an attempt to stimulate a sagging economy.

The economies of the 15 countries that make up the euro zone are experiencing high inflation, slowing consumer and industrial demand and a sense of panic and confusion on financial markets from the subprime and credit crisis.

Analysts say inflation in the bloc of 320 million people that counts for more than 15 percent of the world's global domestic product is simply too high for the ECB to lower its rate from 4.25 percent.