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ECB keeps rates at record low 1 percent as expected


    FRANKFURT (Reuters) - The European Central Bank kept interest rates on hold at a record low of 1 percent as expected on Thursday, as debt fears continue to engulf the euro zone and the region experiences a lopsided economic recovery.

    All 74 economists in a Reuters poll predicted the ECB would leave rates at 1 percent for the 19th month in a row. The current median expectation is for no change until the fourth quarter of 2011.

    Analysts also expect the ECB to prolong its supply of unlimited funding to banks at fixed interest rates due to recent escalation of debt market fears.

    ECB President Jean-Claude Trichet will announce the bank's decision on liquidity support at a news conference starting at 1330 GMT. He will also give details of new staff economic forecasts which are expected to show small upgrades following recent data.

    (Reporting by Marc Jones)