Berlin - The European Central Bank (ECB) left interest rates on hold at a record low as financial markets came under pressure amid a slew of economic worries triggered by global trade fears and deepening concerns about Italy's budget plans.

Rate on hold at zero since March 2016

The Frankfurt-based ECB also confirmed moves announced in June to wind down its 2.4-trillion-euro (3-billion-dollar) emergency monetary plan by the end of the year.

However, a major of focus of ECB chief Mario Draghi's press conference later on Thursday is likely to be the moves by Italy's populist government to boost its budget deficit.

Rome has defied Brussels' call for it to rework its budget, with European Union officials claiming the spending plans breached EU fiscal rules.

Italian Deputy Premier and Interior Minister Matteo Salvini on Thursday ruled out Rome turning to a foreign partner, including Russia, to buy its sovereign debt to head off the threat of a possible financial crisis following a surge in Italy's borrowing costs.

The ECB's benchmark refinancing rate has been on hold at zero since March 2016, with the bank saying it expected borrowing costs to remain at their present levels at least until the middle of next year.

The bank cut its monthly bond purchases from 30 billion euros to 15 billion euros starting this month following a solid performance from the 19-member eurozone's economy, along with a pickup in inflation.

But the build-up to the ECB's announcement on Thursday has been accompanied by a sell-off of shares around the world led by concerns on Wall Street about the outlook for US corporate earnings and trade tensions as a result of US President Donald Trump's protectionist "America First" agenda.

Concerns over Eurozone's growth

The showdown between Rome and Brussels over Italy's budget plans has underlined market worries about the eurozone's economic outlook and the risk of another euro debt crisis.

Market concerns have also been spurred by the threat of Britain crashing out of the European Union without a deal with the EU and turbulent emerging markets.

A batch of economic sentiment surveys has also started to flash warning signals about the eurozone's growth prospects.

The London-based IHS Markit research group said this week its purchasing managers' index (PMI) for the currency bloc slumped to a more-than two-year low this month, dragged down by a weak performance by the French and German manufacturing sectors.

"The pace of eurozone economic growth slipped markedly lower in October, with the PMI setting the scene for a disappointing end to the year," said IHS Markit chief economist Chris Williamson.

The Munich-based Ifo institute said its closely watched German business confidence survey dropped for the second-consecutive month in October, just as the ECB's governing council was winding up its deliberations in Frankfurt. While the economic outlook has become more uncertain, annual eurozone inflation edged up to 2.1 per cent in September from 2 per cent in August, according to preliminary data released last month.

The September rise pushed consumer prices further away from the ECB's annual target inflation rate of just below 2 per cent.

In addition to the refinancing rate, the ECB also announced on Thursday that it was holding its deposit rate at minus 0.4 per cent and the marginal lending rate at plus 0.25 per cent.