European, British Central Banks Leave Rates Alone

FILE - In this July 9, 2009, people are silhouetted as they walk past the Bank of England in the...

FILE - In this July 9, 2009, people are silhouetted as they walk past the Bank of England in the City of London. British industrial production and new car registrations rose in recent months, data showed Thursday, Nov. 5, 2009, as the Bank of England announced it would increase the size of its monetary stimulus. (AP Photo/Matt Dunham, file)

(AP)

The head of the European Central Bank on Thursday hinted it could begin withdrawing some of its crisis measures soon, while the Bank of England pumped more money into the economy in an attempt to get Britain out of recession.

Neither bank touched interest rates, already at record lows of 1 percent for the eurozone and 0.5 percent in Britain.

ECB President Jean-Claude Trichet said that the 16 euro countries face an uncertain recovery. But he broadly hinted the bank was getting ready to take back some of its added lending measures that have provided banks with ready cash during the financial crisis and promised to say more at next month's meeting.

"We will do the phasing-out in a timely and gradual fashion, I'll give the rendezvous in a month's time," he said. He said he wouldn't discourage speculation the bank will end its 12-month credits to banks, one of its crisis measures aimed at keeping the financial system afloat.

He said the eurozone faces only a gradual and uncertain recovery. "At the same time, the latest information continues to signal an improvement in economic activity in the second half of this year," he said. The bank "expects the euro area economy in 2010 to recover at a gradual pace, recognizing that the outlook remains subject to high uncertainty."

He urged banks to do their part to get the economy back on its feet.

"We call upon the banks, a very strong message to banks, to repair their balance sheets, to do their jobs to lend to the private sector, the economy to private households."

With interest rates already about as low as they can go, markets are watching central bankers' efforts to stimulate the economy by other means such as expanding the money supply. The Bank of England did that Thursday by saying it would add 25 billion pounds ($41 billiom) to its existing 175 billion pound program of bond purchases.

It was less than the 50 billion pound increase some analysts had expected.