Poll - ECB to hold rates at 1 pct deep into 2010

By Jonathan Cable

LONDON (Reuters) - The European Central Bank will not budge on interest rates when it meets next week and it will be near the end of 2010 before it raises them, despite brightening their growth outlook, a Reuters poll found.

All 80 economists in a poll before the ECB meets on Dec. 3 said the central bank would leave rates at a record low of 1.0 percent, with only a handful seeing any change before the second half of next year.

"It is still too early to talk about rate rises," said Colin Ellis at Daiwa SMBC, who sees rates on hold until at least next July.

Median forecasts show rates on hold until the final quarter of 2010 when they will rise to 1.5 percent.

This compares to a poll taken two weeks ago, which saw the first rise in the third quarter, to 1.25 percent, but still ending the year at 1.5 percent.

The ECB has been battling to pull the 16-nation bloc out of a deep recession and figures released earlier this month showed its loose monetary policy had paid off with a return to growth in the third quarter of 0.4 percent after five consecutive quarters of shrinking output.

As part of its campaign the central bank has slashed interest rates, purchased covered bonds on the open market and offered unlimited funds for banks for up to a year at a fixed rock-bottom rate.

But that programme of offering unlimited funds may soon be coming to an end. A separate poll on Tuesday of euro zone money market traders found 20 of 24 saying December's 12-month auction would be the last one-year operation.