BERLIN (AP) — The European Central Bank is set to leave interest rates untouched at 1 percent as it meets Thursday amid a still–uncertain global economic outlook, but may raise its 2010 growth projection for the eurozone.

Since the ECB last considered rates, data have shown that the 16–nation euro area's economy grew by 1 percent in the second quarter over the previous three–month period — powered higher by 2.2 percent growth in export–driven Germany.

Still, that pace is likely to cool and growing fears about the recovery in the U.S. have darkened the picture. Japan's economic outlook has darkened as the yen's rise pressures its exporters at a time when its economy is barely growing

Europe's economic rebound has largely been fed by a recovery in global demand.

That is why ECB President Jean–Claude Trichet is expected to signal that it's no time to discuss interest rate hikes when he fronts his monthly news conference following the interest rate decision.

The bank's benchmark refinancing rate has stood at a record low of 1 percent since May 2009. Higher rates would help ward off inflation as the economy bounces back but could dampen growth.

The ECB is expected not to change the remaining special liquidity arrangements for banks that were introduced at the height of the financial crisis, as it is well aware that the cost of sorting out the government debt crisis in a number of countries in Europe will be heavy.

But while U.S. Federal Reserve chairman Ben Bernanke has conceded that the Fed may have to back another round of monetary easing if the U.S. economy continues to weaken, Trichet will be able to hold off announcing new measures — for now at least.

Given the rosier current backdrop, the ECB is expected to revise up its growth projection for 2010 up to around 1.3 percent from the 1 percent predicted in June.

Conversely, the figure for 2011 could well be revised down from June's 1.2 percent amid mounting concerns about the pace of the U.S. recovery.