Central banks in both England and Europe left their key interest rates unchanged today as expected. But future cuts remain a possibility amid weak, uncertain growth, economists say.

The European Central Bank (ECB) held rates steady at 4.25%; the Bank of England kept its Bank Rate at 5.0%.

TD Economics says that the ECB indicated that the euro area economy “is currently experiencing an episode of weak activity”, which is expected to be followed by a gradual recovery.

“The uncertainty surrounding this outlook for economic activity is particularly high at the current juncture and, generally, downside risks prevail,” the ECB noted. These risks include renewed increases in energy and food prices, and the potential for financial market turmoil to spill over to the real economy more than expected.

Given the bank’s latest comments, TD says that it remains comfortable with rate cuts coming in the March-May time frame.

In addition to its rate decision, the ECB Governing Council also decided to renew operations designed to boost market liquidity. It is renewing the outstanding six-month supplementary longer-term refinancing operation of 25 billion euros that will mature on October 9. It also decided to renew the two three‑month supplementary LTROs (50 billion euros) that will mature on November 13 and December 11, respectively.

“The renewal of these supplementary LTROs is aimed at supporting the further normalisation of the euro money market. The renewal will not affect the regular LTROs,” it said.