The European Central Bank went on its four-week summer break yesterday, leaving its key rates on hold. But economists were hopeful that the ECB could step in and give the ailing euro-zone economy a boost soon after it returns from its summer holiday, when it could cut rates by up to half a point.

Few observers had been expecting a move, anyway, given recent hawkish comments by ECB officials. But a further spate of weak euro-zone data and a surprise rate cut by the Bank of England had helped fuel some hopes for and ECB rate cut.

The Bank of England completely wrong-footed the markets by trimming a further quarter point off its key base rate to bring it to 5.0 per cent.