The European Central Bank kept interest rates on hold at a record low on Thursday, as expected, amid a lopsided economic recovery and continued worries about the banking sector.

All 78 economists in a Reuters poll predicted the ECB would leave rates at 1 percent for the 16th month in a row in September and the median expectation is for no change until the fourth quarter of 2011.

Analysts also expect the euro zone central bank to extend its liquidity safety-net to banks, offering unlimited funding until early next year at fixed interest rates.

ECB President Jean-Claude Trichet will announce the decision on liquidity supplies at a news conference starting at 1230 GMT, when he will also reveal new staff economic forecasts.

(Reporting by Krista Hughes and Marc Jones)