At about the time that four terrorist bombs exploded in London, policy makers at the European Central Bank and the Bank of England were preparing to hold their regular meetings to take decisions on interest rates.
ECB President Jean-Claude Trichet said there is no need for action and the euro zone base rate will remain at 2%.
He sent a message of sympathy to London, saying: “In these dreadful circumstances we have observed a minute’s silence in memory of the victims of the terrorist attacks and we have conveyed out sincere condolences to the British people and the Bank of England.
Trichet said he had discussed the implications for financial markets with the Governor of the Bank of England Mervyn King and US Federal Reserve Chairman Alan Greenspan.
He added that if there was information that called for action the bank would react in real time.
There was no change at the Bank of England either. The UK rate stays at 4.75%. Analysts said that the Bank of England’s governing body would not have wanted to do anything that might look that they were acknowledging or reacting to the terrorist’s actions. Immediately after the explosions the pound dipped in value. It fell to a one-month low against the euro and its lowest level against the dollar in 19 months. But the British currency recovered once it became clear UK interest rates were not going to change.