ATHENS (AFP) - Signs the eurozone economy was slowing down were unlikely to lead to lower interest rates as governors of the European Central Bank gathered here Thursday, analysts said.

"For now, the ECB is firmly on hold," Bank of America economist Holger Schmieding said in a summary of market sentiment.

The ECB governing council met in Athens at a twice-annual event organised in a eurozone capital, hosted this time by Greek central bank governor Nicholas Garganas, who is to step down when his term expires in June.

ECB governors have kept the main lending rate at 4.0 percent since June last year even as the US Federal Reserve slashed its rate to 2.0 percent and the Bank of England gradually lowered the cost of borrowing in Britain.

BoE policymakers were expected to keep rates steady at 5.0 percent Thursday following their own meeting in London on Thursday.

The contrasting central bank decisions pushed the euro to record highs against the dollar and pound last month, making eurozone exports more expensive on global markets and sparking criticism of the ECB in some quarters.

But the bank's governors focus on inflation, which hit a record 3.6 percent in March and was expected to remain well above the ECB's target of just below 2.0 percent for months to come.

UniCredit analysts forecast that a dip to 3.3 percent in April "will provide only short-term relief and inflation will jump back to 3.5 percent in May."

ECB president Jean-Claude Trichet has warned that spikes in energy and food prices mean households curb spending, so undermining the consumption many hoped would pick up amid falling unemployment and wage increases in countries such as Germany, the biggest European economy.

On Wednesday European Union data showed that eurozone retail trade fell by 1.6 percent in March on an annual basis.

"The latest data confirm that the domestic household sector is so far doing nothing to make up for slowing external demand," Capital Economics economist Jennifer McKeown said.

German industrial orders also posted their fourth straight drop in March, an indication that the export-oriented economic engine was likely to start losing steam.

"Evidence of a moderate slowdown in euro-zone economic activity has mounted in the past month, with even those survey indicators that were previously most optimistic taking a turn for the worse," Capital Economics added Thursday in a research note.

The European Commission's economic indicator "now points to a slowdown in eurozone annual growth to around 1.5 percent," it said.

Schmieding noted that "the strong euro, the soft US economy and the global uncertainties weighing on domestic business investment are taking their toll."

Many analysts expected that once inflation came off the boil and compelling evidence of an economic slowdown appeared, the ECB would begin to cut interest rates.

Aurelio Maccario at UniCredit Markets said his bank was confident that "the conditions for entering an accomodating cycle will emerge, and that at the end of the year the central bank will start cutting rates."

On such views, and hopes that the US economy was turning the corner, the dollar has begun a recovery against the euro, with the single currency trading early Thursday at 1.5342 dollars -- well below its record above 1.60 dollars set last month.

But such a trend, along with a possible rebound in global financial markets and the US economy, "would eventually make the need for lower ECB rates obsolete," Schmieding commented.