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Top central banks yet to move for exit

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  • The top central banks have shown little inclination yet to choke off the extraordinary support given to economies shaken by global financial crisis but some have offered the first signs of changing tack.

    The Federal Reserve, European Central Bank and Bank of England all left interest rates at record lows this week and the British central bank opted to pump yet more money into its economy.

    The US economy quit recession in the third quarter and figures due next week are expected to show the euro zone has followed suit but Britain continues to languish.

    More upbeat forward-looking data has left investors vexed as to when central banks will begin to remove stimulus -- those in Australia and Norway have already raised rates.

    ECB President Jean-Claude Trichet said on Thursday he expected the euro zone economy to recover at a gradual pace in 2010, after the central bank left rates at 1.0 percent, and signalled some of the bank's liquidity measures could soon be halted.

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    The Bank of England decided to pump another 25 billion pounds ($41 billion) into its economy on Thursday, taking its quantitative easing (QE) to 200 billion pounds in total, but slowed the pace of the programme.

    The BoE also left interest rates at a record low of 0.5 percent and said the prospect was for "a slow recovery in the level of economic activity".

    The Fed on Wednesday expressed growing confidence that an economic recovery was building but stuck to its commitment to keep borrowing costs near zero for "an extended period".

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