Euro zone interest rates remained on hold as British rates continued on their downward path for the fourth month in a row.

The Bank of England cut its key interest rate by a quarter point to 6 per cent, saying it was anxious about the country's economic slowdown. The reduction means interest rates are now at the same level as when the Labour government came to power in May 1997 and gave rate responsibility to the Bank of England.

However, the 6 per cent rate is still double the level of the euro zone. The European Central Bank's governing council left its 3 per cent rate unchanged, as expected, after its first meeting since the introduction of the euro.

Earlier, another country outside the euro zone, Denmark, cut its key interest rates by 0.2 of a point to 3.75 per cent.

Speaking after the first meeting of the European Central Bank (ECB) following the euro's introduction, its president, Mr Wim Duisenberg, confirmed rates would remain on hold at 3 per cent. The ECB also confirmed its earlier assessment of inflation in the euro zone.