(RTTNews) -  Amid slowing inflation and rising concern over future growth prospects, the European Central Bank on Thursday left its key interest rate unchanged at a record low of 1% for the 16th month.

The last change in the key interest rate was in May 2009, when the bank cut the rate by 25 basis points to the current level of 1%. The bank has lowered the key interest rate by a total of three and a quarter percentage points since early October 2008. The central bank also retained its interest rate on the marginal lending facility at 1.75% and that on the deposit facility at 0.25%.

(RTTNews) -  European Central Bank President Jean-Claude Trichet has decided to extend emergency lending measures into January, in order to secure the region's uneven economic recovery.

In remarks made after the ECB announced its was keeping interest rates unchanged at one percent for a sixteenth straight month, Trichet said that banks will be provided unlimited one-week and one-month loans until at least January 18, 2011.

The central bank has also decided to conduct 3-month longer-term refinancing operations in October, November and December of this year, as fixed rate tender procedures with full allotment.

Regarding monetary policy, Trichet said the ECB has no intention to signal any change in interest rates, as the European economy chugs along on the rocky road to recovery.

"Recent economic data for the euro area have been stronger than expected, partly owing to temporary factors," Trichet noted. "Looking ahead, the recovery should proceed at a moderate pace, with uncertainty still prevailing."

Earlier in the day, it was revealed that euro area real GDP grew strongly on a quarterly basis, increasing by 1.0% in the second quarter of 2010, supported by ongoing growth at the global level.

The ECB now expects euro-zone growth to be in a range between 1.4% and 1.8% in 2010 and in a range between 0.5% and 2.3% in 2011. The range has also been revised upwards for both 2010 and 2011, reflecting carry-over effects from the projected stronger growth towards the end of 2010.

(RTTNews) -  U.K. house prices dropped more than expected in August as the imbalance between supply and demand increased, new data showed on Thursday.

Nationwide said house prices fell 0.9% compared to July, faster than the 0.5% decrease in the previous month. Economists had forecast a 0.3% drop.

The average price of a U.K. home was GBP 166,507. This marks the first time house prices have dropped for two straight months since January - February last year.

(RTTNews) -  Interest rate decision from the European Central Bank along with revised June quarter GDP and producer price inflation data from the eurozone, house price data from the U.K., and unemployment figures from France are due on Thursday, headlining a busy day for European economic news. All times in ET.

Major economic news released on Wednesday were mostly negative, with the eurozone's manufacturing PMI falling to a six-month low, while the U.K.'s PMI slumped to a nine-month low. Also, German retail sales registered a surprise drop, suggesting domestic demand in Europe's largest economy was still sluggish.

At 1:30 am, the French statistical office INSEE is scheduled to release unemployment data for the June quarter. Economists expect the unemployment rate to rise to 10% from 9.9% in the first quarter, while the mainland unemployment rate is seen picking up to 9.6% from 9.5%.