FRANKFURT, Germany (AP) -- The European Central Bank is expected to hold off on any change in interest rates Thursday as it sizes up its next steps in fighting the eurozone debt crisis.
The bank's 23-member governing council meets for its monthly rate meeting after two straight months with quarter-point rate cuts aimed at spurring a fading economy in the 17 countries that use the euro.
The key refinancing rate stands at a record low 1.0 percent. The Bank of England is also expected to leave rates unchanged at its meeting Thursday.
Most analysts think the ECB will take a break for at least a month, though there are a few that predict a surprise cut.
Bank President Mario Draghi will be questioned about his outlook for the eurozone economy and his remarks will be closely examined for clues as to whether the bank might cut rates further.
Many economists expect the 17-country eurozone to go through at least a mild recession that could have started in the last three months of 2011. Rate cuts can spur growth by lowering borrowing costs for businesses.
A shrinking economy would make it harder for indebted countries — such as Italy — to reduce their debt levels and undermine the willingness and ability of the better-off countries — such as Germany and France — to help them.
Economists are of different opinion as to whether 1 percent will remain a rock bottom floor for the ECB, or whether it will eventually join the United States Federal Reserve and the Bank of England in pushing rates closer to zero. The Fed's key rate is 0-.25 percent and the Bank of England's is 0.5.
A raft of other issues are before Draghi. They include the ECB's efforts to support the banking system with cheap, long-term loans aimed at letting shaky banks lock up the financing they need for up to three years. That offer was taken up by 523 banks that borrowed euro489 billion ($622 billion). But some of that money has been simply recycled back to the ECB in the form of overnight deposits at low interest rates, indicating that banks were afraid to lend.
Another is the bank's program to buy government bonds in the secondary market. That step is aimed at helping keep interest yields down for Italian and Spanish debt. The ECB has said that the program is limited in size and amount and that it is up to governments to reduce their deficits and improve growth so that they will be seen as good credit risks and be able to borrow affordably.
Still, a number of economists think that the ECB may be forced to buy larger amounts of bonds to prevent a debt default by a larger eurozone economy such as Italy, the current focus of the crisis. Greece, Portugal and Ireland, which are much smaller, have already been bailed out.
Draghi may also be asked about Greece's efforts to convince bond holders to accept a 50 percent reduction in the value of their investments as part of a second, euro130 billion ($165 billion) bailout from the eurozone countries and the International Monetary Fund. The bailout is needed to avoid defaulting on the countries' bonds.
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