The European Central Bank has joined the Bank of England in leaving interest rates unchanged, ignoring calls by Germany to cut rates to boost the economy.

The European bank, which sets rates for the dozen countries that share the euro, left its key rate at 3.25 percent, while the Bank of England left its key rate at four percent.

ECB President Wim Duisenberg told reporters the bank's governing council had discussed "extensively" arguments for and against a rate cut at its meeting. He says the council will continue to monitor closely downside risks to growth.

Most economists had predicted the ECB would not cut, because of rising inflation. Inflation in the euro-zone exceeds the bank's goal of two percent and consumer prices rose 2.1 percent in October.

Germany, the largest economy in the eurozone, had agitated for a rate cut to spur the sluggish economy, which has hurt tax collections.

There are fears that Germany may slide back into recession as the euro rose on Wedneday to its highest level since late July after the U.S. central bank slashed interest rates by half a percentage point to 1.5 percent. The move by the central bank signals that a recovery in the world's biggest economy may be faltering.

However, some good news came out Thursday. A report from the U.S. Labor Department shows U.S. business productivity, or output per hour worked, jumped four percent in the July-September quarter.

Gains in productivity are helping to keep inflation down, an important factor for central bank policy makers as they try to energize the U.S. economy.