The Bank of England and European Central Bank both left their benchmark interest rates unchanged today, and confirmed to markets that they don’t intend to cut rates simply to calm money markets.

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 5.75%.

Meanwhile, at its meeting today, the Governing Council of the ECB decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4%, 5% and 3%, respectively.

The BoE noted the existence of turmoil in financial markets, but stressed that its purpose is to maintain price stability. “In recent weeks, heightened concerns about a variety of asset-backed securities have led to disruption around the world, not only in markets for those financial instruments but also in money markets more generally. The MPC’s mandate is to set interest rates to meet the government’s 2% target for CPI inflation,” it said.

CIBC World Markets said, “The statement points at a central bank that is paying attention to the current market disruptions, to the extent that it affects the macro/inflation picture. By emphasising that the Bank’s mandate is inflation, there is also a feeling that like the Fed, the BoE is not in the mood of bailing out financial institutions.”

Meanwhile, in its statement accompanying the rate decision, ECB president, Jean-Claude Trichet, said its monetary policy stance is still on the accommodative side, but, “At the same time, the financial market volatility and reappraisal of risk of recent weeks have led to an increase in uncertainty. Given this high level of uncertainty, it is appropriate to gather additional information and to examine new data before drawing further conclusions for monetary policy in the context of our medium-term-oriented monetary policy strategy aimed at delivering price stability.”

The ECB revised its projections downward. It now foresees average annual real GDP growth in a range between 2.2% and 2.8% in 2007, and between 1.8% and 2.8% in 2008.

As with the BoE, CIBC observed that the ECB, “sought to clarify that the central bank’s mandate to ensure price stability over the medium-term and to ensure the correct functioning of the financial system are two separate responsibilities that should not be mixed. This implies that while the ECB will do its best to ensure liquidity in the interbanking system; bearing in mind the current fundamental picture, those hoping for a rate cut can forget about it.”