5 Nov 2010

Eurozone, UK interest rates held at historic lows

2:02 pm on 5 November 2010

The Bank of England and the European Central Bank have kept interest rates at historic lows.

The UK's central bank held the rate 0.5% and decided not to pump more money into the economy via quantitative easing.

The European Central Bank kept interest rates unchanged at 1%, and also made no extension to its stimulus programme.

Global stock markets have rallied after the US Federal Reserve embarked on a second round of quantiative easing, pumping $US600 billion into the economy.

ECB president Jean-Claude Trichet refused to be drawn on the Fed's action, the BBC reports. He said he had "no further comments on what is done by other central banks that have their own responsibility in their own environment".

However, he did say that he was confident the Fed still supports a strong dollar, despite reports that the Fed wanted to weaken the dollar in order to make its exports more competitive.