Acknowledging that the recession seems to be coming to an end, albeit slowly, the European Central Bank opted to retain its prudent approach, leaving unchanged at one per cent the main borrowing rate.

Speaking after the monthly meeting of the monetary policy committee, ECB president Jean-Claude Trichet said the rates "remain appropriate".

"The significant contraction in economic activity has come to an end and is followed by a period of stability and very gradual recovery," he said. GDP figures issue by Eurostat last week showed that both Germany and France recorded a slight growth after months of negative economic activity.

The ECB also left unchanged the marginal lending facility at 1.75 per cent and the deposit facility at 0.25 per cent.

The rate "continues to guarantee liquidity support to eurozone banks at favourable conditions, Mr Trichet said. "This should promote the extension of credit to the euro area economy and further underpin its recovery."

Although he saluted the "increasing signs of stability" in economic activity, he said prices would continue to remain subdued but predicted a return to moderately positive inflation rates within a month.

According to Eurostat, eurozone inflation was -0.2 per cent in August while industrial producer prices were down by 0.8 per cent in July, after increasing the previous month.

Retail trade is also down, along with GDP, while unemployment in the 16 countries using the euro has hit 9.5 per cent, up two per cent in 12 months.