The European Central Bank's (ECB) main refinancing rate remains at 1.0 per cent while the Bank of England (BoE) left its rate at 0.5 per cent.

Analysts had expected both banks to hold steady and observers will be watching for comments from ECB President Jean-Claude Trichet later to hear his outlook on the economy and the bank's efforts to promote increased bank lending and financial stability.

Trichet has said that governments need to have exit strategies from the large economic stimulus packages of recent months at the ready but has also stressed the severity of the economy downturn.

The ECB, which sets monetary policy for the 16 countries that share the euro currency - a bloc of some 320 million people - is holding its meeting in Venice, Italy, part of a twice-yearly programme to visit other eurozone countries.

In London, in addition to keeping its main interest rate unchanged at 0.5 per cent, the BoE also held off from any further moves to expand the money supply, for now.

Quantitative easing

Both those decisions were widely expected but the BoE said it would keep its asset purchase programme, known as quantitative easing, "under review".

At present, the BoE can buy up to £175 billion (US$281 billion) of financial assets, such as government bonds, from the banks.

The aim of the policy is to increase the money supply in the hope that eventually the banks will start lending more to the private sector.

- AP