The world’s leading central banks made their largest injection of funds into the banking system since early August yesterday, as the Bank of England gave warning that it was “too soon to tell” how much damage the credit squeeze could do to the real economy.

The US Federal Reserve injected $31.25 billion (£15.5 billion) of liquidity, the largest single-day amount since August 10, while the European Central Bank (ECB) lent banks an extra €42.2 billion (£28.6 billion) and the Australian Central Bank promised to add more funds.

The Bank of England’s Monetary Policy Committee (MPC) coupled its widely expected vote to keep interest rates at 5.75 per cent with an unexpected statement that sent sterling tumbling, as traders bet that rates had peaked.

It was only the third time since the MPC was set up in 1997 that it has issued a statement while leaving rates steady. But the Bank, which has pledged to ease pressures on overnight borrowing rates next week, took no additional action yesterday. With no help in sight, the three-month inter-bank Libor rate rose to 6.88 per cent, a full 113 basis points above the base rate, the widest spread in 20 years.

Banks continue to refuse to lend to one another as uncertainty continues over the fallout from the US housing slump.

Analysts said that the Fed’s decision to add liquidity was prompted by the need to keep the Fed Funds rate at its target level of 5.25 per cent.

Kenneth Kim, economist at Stone and McCarthy Research Associates in New Jersey, said: “In addition, today’s injections were partly aimed at calming fears of a credit crunch that are still lingering as evidenced by the elevated Libor rate.”

The ECB followed its first emergency operation in the money markets since mid-August by voting to leave its benchmark rate unchanged at 4 per cent. Jean-Claude Trichet, who had flagged up a September rate rise before the credit crisis broke, said that uncertainty had now risen “in a very significant fashion”.

The ECB promised to “monitor very closely” the risks to inflation. Holger Schmieding, of Bank of America, said: “In the current climate of uncertainty, this amounts to no more than a vague tightening bias.”

In its statement, the MPC emphasised that its job remained to tackle inflation and said that it had discussed the worldwide financial disruptions in that light. It gave a balanced summary of the risks to inflation, saying that pay pressures were muted and that there were “tentative signs of a slowing in consumer spending” but that there was limited slack in the economy and pricing pressures remained.

“It is too soon to tell how far the disruption in financial markets will impair the availability of credit to companies and households,” the MPC added.

Geoffrey Dicks, of RBS, said: “It could be read as slightly doveish . . . It is also possible that the statement might have been prompted by there being some votes for a cut. Overall the climate has changed considerably from a month ago and a November rate hike looks unlikely.” A Reuters poll of analysts gave a 30 per cent chance of interest rates rising to 6 per cent by the end of the year, down from 35 per cent a week ago.

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts