ECB holds rates, cuts growth outlook for eurozone

European Central Bank head Mario Draghi says the bank has cut its growth outlook for next year - but adds that a gradual recovery should take hold by the end of 2013.

The bank now sees the economy shrinking by 0.3 per cent in the 17 European Union countries that use the euro. That's the midpoint of the forecast range for between minus 0.9 and plus 0.3 per cent.

Previously the bank projected growth of 0.5 per cent.

Draghi spoke after the bank left its benchmark rate unchanged at a record low of 0.75 per cent.