

"I have absolutely no reason to say that vigilance has disappeared from our potential vocabulary. It is an expression we can certainly utilize when we judge it is time to utilize it."
While the U.S. Federal Reserve has lowered rates seven times in as many months to 2 percent, the ECB has been content to stand pat to try to combat rising inflation in the bloc of 317 million people, which accounts for 22 percent of global gross domestic product, behind the U.S. at 27 percent.
"While the U.S. economy has succumbed to stagnation and the U.K. economy is decelerating sharply, the euro zone has so far held up fairly well," said Holger Schmieding, Bank of America's chief European economist. "For the time being, that is until the summer break ends in September, the ECB is probably firmly on hold," he said.
In London, the Bank of England shied away from back-to-back trims despite slowing economic growth.
The British bank does not issue a statement when it leaves rates unchanged, but the decision was anticipated by most analysts after the bank's monetary policy committee made a quarter of a percentage-point cut last month.
But unlike the ECB, most economists expect the Bank of England to cut rates to 4.75 percent next month despite domestic inflation running at 2.5 percent, well ahead of the government's 2 percent target.
"Most MPC members probably currently favor maintaining a policy of gradually but steadily trimming of interest rates," said Global Insight economist Howard Archer, who is predicting more cuts after June to bring rates to 4 percent by the end of 2008.
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AP Business Writer Jane Wardell reported from London.
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