ATHENS, Greece (AP) -- The European Central Bank and the Bank of England both held their official interest rates steady on Thursday as rising inflation outweighed concerns about slowing economic growth across the European Union.But the two banks are expected to take different paths next month when the ECB is likely to again keep its borrowing rate at 4 percent to fight inflation, while many economists expect the British central bank to cut its own rate by a quarter percentage point from the current 5 percent.
Soaring food and energy prices have made the European banks reluctant to follow the U.S. Federal Reserve in cutting interest rates to shore up consumer confidence and economic growth. Interest rate cuts, while stimulating the economy, can also worsen inflation as they encourage consumer spending.
"As we have said on previous occasions, inflation rates are expected to remain high for a rather protracted period of time, before gradually declining again," ECB president Jean-Claude Trichet told reporters in Athens.
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