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updated: 2/6/2014 8:05 AM

European rates decision could be close call

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Associated Press

FRANKFURT, Germany -- The European Central Bank is facing conflicting pressures as it decides Thursday whether to cut interest rates for the 18-country euro currency area.

A number of economists think the bank will hold off slashing rates or taking other measures that might stimulate the economy, while a few think it could cut its benchmark rate from the record low of 0.25 percent to 0.1 percent.

Low inflation of only 0.7 percent has raised fears of deflation -- a downward price spiral that has afflicted Japan. And retails sale for December -- the Christmas period -- disappointed.

Other indicators, such as a survey of business managers, suggest the economy is expanding in line with the bank's prediction for a gradual upswing -- and won't need more stimulus.

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