ECB holds rates as nascent European recovery takes hold

FRANKFURT (REUTERS) - The European Central Bank (ECB) left its main interest rate unchanged at a record low of 0.5 per cent on Thursday, as recent economic data showed a nascent recovery taking hold in the euro zone.

Strong orders for manufactured goods helped factory activity in the currency bloc rise at the fastest pace in over two years last month and led to backlogs of work for the first time since mid-2011, a survey showed on Monday.

Euro zone inflation for August is expected to slow to 1.3 per cent from 1.6 per cent in the previous month. The ECB's goal is just below 2 per cent, though it looks at prices over the medium term.