FRANKFURT – The European Central Bank left its benchmark interest rate unchanged at 1 percent for the ninth month running Thursday while the Bank of England called a halt to its policy of pumping money into the British economy.
In a statement, the European Central Bank's president Jean-Claude Trichet said that price developments remain "subdued" and that inflation expectations were "firmly anchored" around the Bank's target of "close to, but below 2 percent."
Trichet also said the eurozone economy continued to expand at the start of the year but warned that the recovery would be "uneven" and "uncertain."
The central bank to the 16 countries that use the euro has kept its benchmark rate unchanged since May 2009 to boost patchy growth in the wake of the global financial crisis.
Trichet will most likely be quizzed about the debt crisis afflicting Greece and concerns that it will spread to other euro countries like Portugal and Spain.
The government debt woes have undermined the euro currency, and raised speculation that EU members might have to fund a bailout, although Greek and EU officials say that won't be needed.
Investors will be particularly interested to see whether Trichet sticks with his hard line toward Greece — three weeks ago he slammed talk of a Greek departure from the euro as an "absurd hypothesis" and dismissed any suggestions that the central bank would get involved in any financial rescue.
Analysts think that Trichet will continue to distance the ECB from any idea of helping Greece and will instead leave it in the in-tray of the European Union member governments — particularly Germany and France cheap payday advance.
On Wednesday, the European Commission gave its cautious backing to the Greek government's plan to slash the budget deficit from around 13 percent in 2009 to below 3 percent in 2012.
"The ECB struck a tough line last month, which left us in little doubt that if help was needed for Greece it would not come from the ECB but from the eurogroup or the fiscal authorities in Europe, and we do not expect this month's press conference to alter this view," said Nick Matthews, senior European economist at the Royal Bank of Scotland.
Trichet's expected attempt to deflect the issue from the ECB does not mean he's not worried.
The clear worry for Trichet and his fellow rate-setters is that problems on the periphery of the eurozone and the financial burden of a bailout from the core countries like Germany and France could derail the recovery from recession.
Earlier, the Bank of England kept its main interest rate unchanged at the record low of 0.5 percent and said it would not ask the government for the authority to pump more newly created money into the barely recovering British economy.
The British central bank's rate-setting Monetary Policy Committee voted to keep its asset purchase program unchanged at 200 billion pounds ($317 billion) but that it will continue to monitor the scale of the program and could ask the government to make further purchases.
