There was little reaction from financial markets which expect no change in monetary policy until much later this year as the central bank waits for a clearer recovery from the worst economic downturn since World War II.

Britain's economy pulled out of recession at the end of last year, but the strength of the upturn remains in doubt at a time when both the government and the banking sector desperately need to get their balance sheets back in shape.

It is now a year since the BoE slashed interest rates to 0.5 percent and began buying bonds with newly-created money - quantitative easing in the jargon - in an unprecedented attempt to kickstart growth.

The BoE has indicated it is prepared to restart its quantitative easing program - halted at 200 billion pounds last month - if the economy deteriorates, putting it at odds with many other central banks who are talking more on exit strategies.

Few economists expect such radical action to be called for but most expect the BoE to keep interest rates at 0.5 percent until the fourth quarter of the year at the earliest.

Meanwhile, the European Central Bank left its benchmark interest rate unchanged at 1 percent for the tenth month running Thursday and confirmed that it will keep scaling back crisis lending measures even though the economy in the 16 countries that use the euro is barely growing.

While the Bank of England issued a limited statement, providing no explanation for its decision, the European Central Bank President Jean-Claude Trichet told a press briefing that the recovery in the euro zone was "on track" but likely to "remain uneven" - figures earlier confirmed that the economy grew by a paltry 0.1 percent in the last three months of 2009 as the recovery in Germany stalled and Italy contracted once again.

"Overall, the governing council expects the euro area economy to grow at a moderate pace in 2010, in an environment marked by continued uncertainty," Trichet said. Trichet said the ECB expects growth this year to be between 0.4-1.2 percent, against December's forecast of between 0.1-1.5 percent. For 2011, the ECB expects growth of 0.5-2.5 percent, up from December's forecast of 0.2-2.2 percent.

Trichet also said price developments "remain subdued" and that the ECB expects inflation to be around 1 percent in the near-term, below the target of below, but close to 2 percent.

Despite the fairly modest economic recovery taking place in the euro zone, Trichet confirmed that the bank will continue to get rid of cheap bank lending operations introduced when the financial crisis first exploded - these were designed to allow the commercial banks to have access to money at a time when the credit markets had seized up.