Europe stocks end down as rates held; miners gain

By Sitaraman Shankar

LONDON, May 8 (Reuters) - European shares ended slightly lower on Thursday, weighed down by financials after the region's top two central banks kept rates on hold as expected and investors saw little to suggest euro-zone borrowing costs would fall soon.

But mining stocks rallied sharply on fresh talk of consolidation in the sector, limiting losses on the pan-European FTSEurofirst 300 benchmark, which ended down 0.1 percent at 1,360.88 points.

Banks took the most points of the index, tracking U.S. peers that fell after regulators urged increased government oversight of investment banks.

Swiss bank UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) fell 5.1 percent, while Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) and Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) slipped 2.5 percent.

Austrian bank Raiffeisen (RIBH.VI: Quote, Profile, Research, Stock Buzz) tumbled 7.8 percent to top European losers after its first-quarter earnings disappointed investors.

Earlier, the Bank of England kept rates at 5 percent and the European Central Bank stayed at 4 percent, as expected.

ECB President Jean-Claude Trichet said that the bank's current policy stance would help it achieve price stability, although inflation was likely to remain high for some time amid turbulent markets.

"The ECB will need to see more of a slowdown in the economy for the next months before it lowers rates, and we expect this to happen in the third quarter," said Thierry Lacraz, strategist at Swiss bank Pictet.