European, British Central Banks Leave Rates Alone

GEORGE FREY

FRANKFURT (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."