ECB, BOE keeps rates on hold

The European Central Bank and the Bank of England today both kept interest rates on hold.

The ECB kept its main refinancing rate unchanged at a record low of 1 percent, as expected by economists.

"On the basis of its regular economic and monetary analyses, the Governing Council decided to leave the key ECB interest rates unchanged. The current rates remain appropriate," Jean Claude Trichet, president of the ECB, said in a statement.

"The incoming information and analyses since our last meeting in early September have confirmed our previous assessment. While annual HICP inflation was still slightly negative in September, according to Eurostat’s flash estimate, it is expected to turn positive again in the coming months and to remain at moderately positive rates over the policy-relevant horizon.

"At the same time, the latest information further supports our view that the euro area economy is stabilising and is expected to recover at a gradual pace. However, uncertainty remains high. As regards medium to longer-term inflation expectations, they remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term. The outcome of the monetary analysis confirms the assessment of low inflationary pressure over the medium term, as money and credit expansion continues to moderate. Against this background, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households."

"There was no surprise, and no reason for a surprise," said Howard Wheeldon, strategist at BGC Partners, in London.

"Nothing has changed. Markets go on very much as before with positive momentum. But the data over the coming months may suggest we have raced a bit too far ahead of ourselves."

Earlier, the Bank of England kept interest rates on hold at a record low of 0.5 percent and left 175 billion pounds ($281.2 billion) of quantitative easing in place.