European Central Bank (ECB) chief Jean-Claude Trichet has talked down the chances of a European rate cut.

The US central bank cut interest rates to 3.5% from 4.25% on Tuesday to stave off a recession, and some analysts had hoped that the ECB would follow suit.

However, in a speech to the European Parliament he stressed the importance of keeping inflation under control at a time when stock markets are falling.

Inflation in the eurozone is at its highest level for more than six years.

Mr Trichet said that the way to prevent a "significant market correction" in Europe is to keep inflation expectations under control.

"Also important is for the central bank to ensure an orderly functioning of the money markets at the level of interest rates required for anchoring the inflation expectations," he said in the speech.

Mr Trichet's speech was one of the factors behind a drop in European stock markets on Wednesday.

UK Prime Minister Gordon Brown has convened Downing Street meetings with his French, German and Italian counterparts, and he is expected to discuss co-ordinated regulation of banking systems, as well as the state of European financial markets.

Source: BBC