Better outlook for economy lets European Central Bank hold off on more stimulus

The European Central Bank has left its benchmark interest rate unchanged at a record low of 0.25 percent.

The bank's 24-member rate-setting council held off on more stimulus Thursday as economic data suggests that Europe's recovery is gaining strength.

A rate cut could give growth a small boost in theory by lowering borrowing costs for banks and companies. It could also help lower the euro, which has strengthened recently. A weaker euro could help exporters and also boost inflation, which at 0.7 percent is well under the ECB's 2 percent goal.

Surveys and other indicators suggest the economy is already picking up steam. The European Commission predicts 1.2 percent growth this year.

Investors are waiting to hear ECB President Mario Draghi give his outlook at a post-decision news conference.