The European Central Bank kept euro zone interest rates on hold on Thursday amid some signs the global recession is tapering off, as US jobless claims fell for a third week and productivity rose. Although much of the economic news remains grim worldwide, there are daily signs of improvement: In a rare piece of positive corporate news, United Airlines sought bids for a 150-jet order that would be its first in a decade. The ECB slashed forecasts for the 16-country economy this year, however, and said growth would not return until mid-2010, while inflation would remain well below its 2 percent ceiling. The ECB's counterpart, the Bank of England, also left benchmark rates unchanged, as did the Bank of Canada. The US Federal Reserve, which like the central banks in Japan and Britain has cut rates below the ECB's 1.0 percent, is already looking ahead to the need to tighten monetary policy to control the impact of its recent massive stimulus. With official interest rates at record lows around the world, policymakers face a tough call on when to start mopping up the flood of liquidity unleashed in the past year to cope with the global financial crisis. Both the ECB and Bank of England held rates at record lows of 1.0 percent and 0.5 percent, respectively. The BoE said it would continue its 125 billion pound ($208 billion) asset-buying program to tackle the recession. The ECB has been split over whether to reduce rates further to spur recovery, but ECB President Jean-Claude Trichet said on Thursday they were appropriate. He said economic activity would decline “at much less negative rates” over the rest of 2009. Trichet also said the ECB would buy 60 billion euros ($85 billion) of covered bonds from next month until June 2010 to support recovery. __
