The European Central Bank held its main interest rate at 1 percent on Thursday, pausing to assess signs the euro zone economic outlook is stabilising and to weigh up potential inflation risks posed by a recent spike in oil prices.

The ECB kept the interest rate on its deposit facility at 0.25 percent and the rate on the marginal lending facility at 1.75 percent.

ECB President Mario Draghi will explain the Governing Council's decision at a 1.30 p.m. British time news conference. The decision was in line with analyst expectations in a Reuters poll.

Financial markets are now looking for hints about whether the ECB is ready to keep rates on hold for an extended period of time or whether it is preparing to cut them further in the coming months to support the still-weak economy.

(Reporting by Sakari Suoninen)