The central bank also reported that the marginal lending rate and deposit rate will remain at 5.25% and 3.25% respectively.

Although economists were unanimous in their expectations for the ECB to hold the marginal lending rate unchanged a 4.25%, an implied market forecast according to the EONIA curve had seen an 8% chance of a 25bp hike on Thursday and a 46% chance of a 25bp cut by March.

Some may suggest that inflation pressures in the region may have peaked in July after the Eurostat flash estimate suggested an inflation rate of 3.8% in August versus the 4.1% rate reported previously. However, economists are quick to point out that price growth has to come down substantially before the central bank can consider the inflation threat over.

"The drop in oil prices since early July has helped ease pricing pressures somewhat. However, inflation and inflationary expectations are still uncomfortably high for the ECB," said Clemente De Lucia of BNP Paribas. "Therefore, even though inflation is expected to ease, albeit gradually, in the coming months, the ECB will probably maintain the refi rate unchanged at 4.25% for a prolonged period."

Attention will now turn to ECB President Jean-Claude Trichet's press conference, scheduled for 8:30 a.m. EDT.

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