The European Central Bank kept its main refinancing rate on hold at 2 per cent on Thursday, as the governing council weighed the risks of rising inflation against the fragile economic recovery in the eurozone.

The central bank’s decision came as no surprise, despite data last week showing eurozone inflation in September rose at its fastest pace in more than a year to an annualised rate of 2.5 per cent, up from August’s 2.2 per cent. Partly driven by high fuel prices, it was the fourth-consecutive month inflation has remained above the bank’s 2 per cent target ceiling.