* ECB leaves rates unchanged

* Rate-sensitive bond yields fall, euro dips

* Markets trim June ECB rate hike bets

(Updates throughout with reaction to ECB decision)

By Harry Robertson and Amanda Cooper

LONDON, April 30 (Reuters) - Traders were feeling a tad

less confident on Thursday that the European Central Bank would

hike interest rates as early as June, as policymakers weigh the

trade off between rising inflation and the hit to growth from

higher energy prices.

The ECB held rates at 2%, saying that the risks of both

higher inflation and lower growth had intensified as the Iran

war disrupts global energy flows.

Bond yields and the euro dipped after the decision as

traders slightly trimmed their bets on a June hike. Money

markets now price in 22 basis points (bps) of increases by June,

compared to around 26 bps earlier on Thursday.

Two-year German bond yields, sensitive to ECB

rate expectations, were last down 7 bps at 2.65%.

A fall in oil prices from their highest level in four years

helped drag yields lower - as did data from earlier in the

session showing that the euro zone economy barely grew in the

first quarter.

The tepid growth underscores how vulnerable Europe, a major

importer of oil and gas, is to rising energy prices and the

tricky situation facing the ECB.

"The economic data released today does not yet warrant a

rate hike," said Felix Schmidt, senior economist at Berenberg.

"So far, inflation has been driven solely by the direct

effects of energy prices. The ECB will wait to see how

significant the indirect effects turn out to be in the coming

months."

However, markets are grappling with a fast moving situation

and expectations can swing wildly over short periods.

Two weeks ago, oil prices fell sharply in the wake of the

April 8 ceasefire and traders had sharply reduced their bets on

ECB hikes, only for them to ramp up again over the last week as

oil prices rose again.

Money markets now price in around 72 bps of ECB hikes by

year-end, down from 76 bps earlier in the session.

The euro fell very slightly after the ECB's decision, but

was last up 0.2% at $1.17, while European stocks

slightly extended their gains and were last up 0.9%.

"The ECB acknowledged rising inflationary pressures but also

more downward risks to growth," said Carsten Brzeski, global

head of macro at ING. "The policy statement didn't give any hint

at the next steps. It looks as if the ECB is in no rush to

hike."