Pressure on the European Central Bank to start printing money like its U.S. and British peers has eased, a Reuters poll showed, while the Bank of England will expand its asset purchase programme next month by less than first thought.

With a recession almost certainly underway in the euro zone, the poll of 66 economists also suggested the ECB will cut interest rates to a new record low of 0.75 percent in February or March from 1 percent currently.

Last month the ECB pumped almost half a trillion euros of cheap three-year money into Europe's banking system. Since then, the consensus chance it will have to engage in quantitative easing (QE) has fallen to 30 percent from 40 percent.

The poll was conducted before Wednesday's news that banks hoarded a record 453 billion euros (374.6 billion pounds) at the ECB overnight.

That suggests that banks are sitting on much of the 489 billion euros of three-year money the ECB provided and are not lending to each other as much as the central bank would like.

The ECB has already bought government bonds from some euro zone states to ease their painfully high borrowing costs, although to avoid stoking inflation it has offset, or sterilised, its purchases by draining equal amounts of liquidity from the banking system.

Without this sterilisation, the process would effectively become quantitative easing, the purchase of bonds with freshly printed money already formally undertaken by the Federal Reserve and the Bank of England.

The pressure to start unsterilised QE in coming weeks has been reduced somewhat by the large take-up in the recent three-year tender, said Elwin de Groot, senior market economist at Rabobank International.

But the huge amount of sovereign refinancing this year may ultimately force the ECB to purchase considerable amounts of bonds - to such an extent that these purchases cannot be fully sterilised.

Italy, for instance, must refinance around 150 billion euros of government debt in February-April alone, while its benchmark 10-year bond still hovers close to the 7 percent threshold at which economists say borrowing costs become unsustainable.


Borrowing costs in Britain, by contrast, have been kept in check thanks partly to its quantitative easing programme.

The Bank of England has already targeted some 275 billion pounds of QE and there is little doubt it will further expand the programme, but at a slower pace than thought, and not in January.

They said the Bank's Monetary Policy Committee (MPC) will announce an extra 50 billion pounds, probably in February, down from 75 billion in the December poll. However, the expected QE total remained unchanged at 350 billion pounds.

The MPC are likely to take stock of the economic situation when preparing their next inflation forecast for the February meeting, so that is the most likely time for an extension of the QE2 programme, said John Hawksworth, economist at PwC.

Thirty-two of 47 economists expected the Bank to announce additional QE at its February meeting.

Yet recent data has raised at least some hope the UK economy might not be faring as badly as some feared.

Growth in Britain's construction sector unexpectedly gained pace in December, according to purchasing managers' indexes (PMIs), and economists expect Thursday's PMIs will show growth in the UK's vast service sector, albeit at a slower speed.

Even so, the likelihood of recession is still high and there is no expectation that British interest rates will rise from their record low of 0.5 percent before midway through next year at the earliest.

It is very clear that interest rates will not rise for many, many months to come, said Howard Archer, chief European and UK economist at IHS Global Insight.

We do not expect any hike before the second half of 2013 and it currently looks eminently possible that the BoE could keep interest rates down at 0.50 percent through to 2014.

(Polling and analysis by Aakanksha Bhat, Ashrith Rao, Somya Gupta, Ruby Cherian and Snehasish Das in Bangalore; Editing by Ross Finley and Catherine Evans)