The European Central Bank has raised slightly its economic growth forecasts for the euro zone.
Earlier the bank's governing council held interest rates steady at 2% after its regular meeting in Frankfurt.
The ECB said it expected euro zone GDP to grow by 1.6% to 2.2% this year, 0.2 points higher than its June forecast. 2005 growth was revised up 0.1 point to between 1.8% and 2.8%.
But the bank increased the lower end of its forecast range for inflation by 0.2 points, because of the rise in oil prices. It now expects a rate of 2.1% to 2.3% this year. The June forecast had been 1.9% to 2.3%.
ECB President Jean-Claude Trichet said the bank expected the economic recovery in the euro area to continue and become more broadly based for the rest of the year.
IIB economist Austin Hughes said the revised growth and inflation projections suggested that the bank was preparing the ground for a rate rise by the end of 2004.
