* Benchmark dollar rates mark new lows post-Fed

* BoE ups quantitative easing by 25 bln pounds

* ECB holds rates at 1 pct, suggests end of 1-yr tenders

(Adds comments from ECB's Trichet)

By Kirsten Donovan

LONDON, Nov 5 (Reuters) - Interbank dollar lending rates
marked new lows on Thursday but sterling and euro rates edged
higher as major central banks laid out their latest policy
positions and views on the economic recovery.

The Bank of England said it would expand its quantitative
easing programme by 25 billion pounds to 200 billion pounds to
help kick start Britain's recession-hit economy [ID:nL5152809],
while the European Central Bank signalled it would begin
wrapping up some of its liquidity provision.

European markets were also digesting the latest statement
from the U.S. Federal Reserve which late on Wednesday expressed
growing confidence that an economic recovery was building, even
as it stuck to its commitment to keep borrowing costs near zero
for "an extended period."

"We're coming to the tail-end of QE, the BoE will be winding
down at the end of the first quarter now, as will the Fed," said
ING rate strategist Padhraic Garvey.

"So by the time we get to the second quarter, QE is done and
we're on to the next phase which is reversal of QE and rate
hikes."

The day's Libor rates were set just ahead of the BoE's
decision and the benchmark three-month sterling rate GBP3MFSR=
rose to 0.60250 percent.

But short-sterling rate futures FSSM0FSSZ0 fell after
the BoE announcement, also pushing implied rates higher, as
there had been some expectation in the market the central bank
would increase its programme by a greater amount.

"This was the right decision. There are many signs of green
shoots appearing across the economy but money supply growth
remains anaemic and until broad money growth increases there
will be doubts about the sustainability of the recovery," said
Graeme Leach, chief economist at the Institute of Directors.

Traded Euribor interest rate futures <0#FEI:> fell after ECB
President Jean-Claude Trichet said the bank's extra liquidity
measures would be phased out in a timely manner.

Trichet also suggested the ECB's extraordinary 12-month
money market operations would not be extended beyond the already
announced December tender [ID:nL5503413]. But analysts said the
market reaction was overdone.

"That doesn't mean that by January, February or March that
liquidity will be less ample," said Christoph Rieger,
Commerzbank rate strategist.

"There will still be enough that rates will still be very
low at that time...gradually phasing out these measures also
does not mean that they will be actively be absorbing
liquidity."

The Bank earlier said it was keeping interest rates on hold
at 1 percent.

Three-month euro Libor EUR3MFSR=, also set ahead of the
ECB's rate decision, edged higher to 0.67500 percent
[ID:nL5414831].

U.S. RATES SET TO STAY LOW

Three-month dollar Libor rates USD3MFSR= marked a new low
of 0.27531 percent.

As expected, the U.S. central bank closed out a two-day
meeting on Wednesday with a decision to keep benchmark overnight
interest rates in a range of zero to 0.25 percent. The vote was
unanimous. [ID:nN04453484]

But the U.S. central bank was more explicit than it had been
previously on why it expects to be able to keep rates
"exceptionally low" for a long time, citing the slack that has
built up in the economy and the lack of an inflationary threat.

"The FOMC seemed to be trying to avoid giving the market any
openings for a bearish interpretation of its statement,"
Wrightson ICAP strategists said in a note.

Minutes of the Bank of Japan's last policy meeting were also
released overnight. [ID:nT145278]