The European Central Bank (ECB) has left its main interest rate unchanged at 0.75%.

The decision was made as the ECB Governing Council met this morning.

The President of the Bank Mario Draghi has explained the move.

“Owing to high energy prices and increases in indirect taxes in some Euro area countries, inflation rates are likely to remain above 2% for the remainder of 2012″ he said.

“They are expected to fall below that level in the course of next year and to remain in line with price stability over the policy-relevant horizon. Consistent with this picture, the underlying pace of monetary expansion continues to be subdued”.

Inflation to stay as expected

He continued to say that “inflation expectations for the Euro area remain firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium-term”.

The ECB says economic activity in the Eurozone is expected to remain weak.

It believes the necessary process of balance sheet adjustment in large parts of the financial and non-financial sectors – along with high uncertainty – “continue to weigh on the economic outlook”.

The Bank says it is essential for governments to support confidence by forcefully implementing the necessary steps to reduce both fiscal and structural imbalances and to proceed with financial sector restructuring.

Mr. Draghi also made reference to agreements made last month.

“In the context of measures to achieve an integrated financial framework (the ECB Governing Council) welcomes in particular the objective of agreeing on the legislative framework for a Single Supervisory Mechanism (SSM) by January 1st 2013″ he added.