European, UK central banks sit tight on rates

VIENNA, Oct 4, 2007 (AFP) – Europe’s two biggest central banks kept interest rates on hold Thursday as they scoured financial and economic data for signs of damage in the wake of a global banking crisis. “This underpins our call for the ECB to be firmly on hold for now,” Bartsch said. The European Central Bank and Bank of England held key rates unchanged, with the ECB saying its would stay at 4.00 percent for the eurozone, a region of more than 300 million people that includes France, Germany, Italy and Spain.

The BoE kept its main rate at 5.75 percent after it took stock of recent turmoil on world financial markets and a run on British lender Northern Rock.

Following a meeting in Vienna, ECB president Jean-Claude Trichet underscored the bank’s evaluation that growth would remain strong but that inflation was still a threat to be reckoned with.

He nonetheless toned down previous comments, as some analysts had forecast, but did not elaborate on the absence of the code phrase “accomodative monetary policy,” previously used to prepare markets for a rate hike.

“Given the heightened level of uncertainty, additional information is needed,” on the effects of financial upheaval that followed t