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Rates held by central banks

BOTH Threadneedle Street and the European Central Bank (ECB) kept monetary policy on hold yesterday as both central banks were in wait and see mode.<br /><br />In the UK, rates were kept at 0.5 per cent and QE at &pound;175bn while the cost of borrowing in the Eurozone remained at one per cent.<br /><br />City analysts had widely expected no move this month by the Bank of England, with most expecting a decision in November, when the Bank has a new set of inflation and growth forecasts.<br /><br />While recent data has been improving, economists are far from optimistic about a UK recovery and expect monetary policy to remain loose for some time.<br /><br />Ian McCafferty, chief economic adviser for the Confederation of Business Industry (CBI), said: &ldquo;Some economic indicators have cast a more optimistic light recently.<br /><br />&ldquo;But businesses and households should be mindful that growth is expected to remain anaemic well into 2010.&rdquo;<br /><br />Across the Channel, the European Central Bank President Jean-Claude Trichet noted that interest rates were at an &ldquo;appropriate level&rdquo; as too much volatility could affect financial and economic stability.