London, Dec. 3 (Bloomberg) -- The Bank of England will probably keep interest rates on hold at their lowest level since 1964 on Wednesday, analysts said. The European Central Bank may do the same the next day. U.K. policy makers have cut rates 1 percentage point to 4 percent since the Sept. 11 terrorist attacks on the U.S.. They will probably wait to see how consumer spending -- two-thirds of the economy -- holds up early in the new year, according to all 26 economists surveyed by Bloomberg News. Consumer confidence rose last month as expectations for the economy improved, the research company Martin Hamblin GfK said. Lending by banks, building societies and stores rose in October at its fastest rate since records began in 1993, central bank figures showed last week. ``Consumer confidence has picked up,'' said Michael Taylor, a U.K. economist at Merrill Lynch & Co. in London. ``There's no sign of a slowdown in spending. The reductions since Sept. 11 do appear to be doing their job. They can wait and see.'' The U.K. central bank, which has cut rates seven times this year, will announce its December decision on Wednesday at noon, London time. The monthly meeting starts a day earlier than usual.

ECB Seen Holding
At its meeting, the European Central Bank will probably leave its benchmark lending rate at 3.25 percent, according to the median forecast of 21 economists surveyed separately. Two predicted the bank will pare its rate by a quarter point. ``The ECB wants to keep its powder dry,'' said Manfred Kurz, an economist at Bayerische Landesbank in Munich. ``The last reduction was relatively big and if they lower rates again by 50 basis points, they have very little room left to act.'' U.K. policy makers are wary of cutting rates too far. ``We will have to move promptly'' to restrict consumption and prevent growth that would spark inflation above the central bank's 2.5 percent target, if the global economy picks up next year, Bank of England Governor Sir Edward George said last week. Investors expect the Bank of England has already finished cutting rates. The implied yield on three-month Libor futures contracts due in March fell 2 basis points to 3.94 percent, six basis points below the central bank's base rate. The yield for September is 4.45 percent. Concern about inflationary prevents European policy makers from cutting again straight away. The ECB wants to keep inflation below 2 percent, a goal it has missed for the past 18 months. ``We will see rising inflation again in January because prices and fees will rise at the beginning of the year,'' Bayerische Landesbank's Kurz said. ``There is no all-clear yet for the ECB.''

European Inflation
ECB President Wim Duisenberg said on Nov. 8 he expects inflation to fall below 2 percent ``early next year.'' European inflation slowed to 2.1 percent in November from 2.4 percent in October, the lowest level in 1 1/2 years, a report Friday showed. Investors expect the ECB to wait until the start of next year before trimming rates again. The implied yield on the March three- month Euribor interest rate futures contract fell 3 basis points to 2.99 percent. The December contract yielded 3.28 percent, 3 basis points more than the ECB's benchmark. Still, policy makers on both sides of the channel are keeping an eye out for how their economies develop. Companies in the U.K. have announced 88,194 job cuts in the year to date. In the 12 nations using the euro, they've said they will cut 273,677.

Profit Forecasts
Abbey National Plc, the No. 6 British bank, said Friday its second-half profit may decline as it sets aside 95 million pounds to cover possible losses from loans to Enron Corp., the debt-laden U.S. energy trader. Valeo SA, Europe's largest publicly traded car-parts maker, said its sales and earnings prospects are deteriorating as demand for new cars weakens. ``We're optimistic with Christmas coming up, but after that we'll just have to wait and see,'' said Jonathon Hillyer, the sales director at Roma Leather Collection Ltd., a maker of leather belts in Northampton, in central England.