ECB keeps interest rates unchanged as expected

The European Central Bank has kept its key rates unchanged, as expected by analysts.

The ECB maintained interest rates, the marginal lending facility and the deposit facility at 0.05%, 0.30% and -0.20% respectively.

President Mario Draghi holds a press conference at 1330 BST to explain the ECB's decision. He is likely to face questions over whether the ECB's quantitative easing programme will be extended in light of the market volatility caused by concerns over China's economic slowdown.

“The ECB is likely to sound more dovish than in July due to the downward revisions in the headline inflation trajectory caused by lower oil prices,” according to UnitCredit analysts.

BNP Paribas said it does not expect any further policy changes in the press conference but sees "changes to the to the statement and the general tone of the commentary".

"We expect downward revisions, reflecting recent developments in external growth, the exchange rate and commodity prices," said BNP's co-head of European market economics, Ken Wattret.