FRANKFURT (Reuters) - European Central Bank president Jean-Claude Trichet warned yesterday that financial market tensions could last longer and hurt the euro zone economy more than expected.

But short-term pressure on euro-zone inflation was rising, he said after the bank had held rates at 4.0 percent where, analysts said, his remarks indicated they were set to stay for some time.

"The level of uncertainty resulting from the turmoil in financial markets remains unusually high and tensions may last longer than initially expected," Trichet told a news conference. "Financial market turbulence ... could have a broader than currently expected impact on the real economy.

"Against this background, we emphasise that maintaining price stability in the medium term is our primary objective," he said. "There is certainly no room for complacency."

Trichet said that the ECB's general view on rates and the economic outlook had not changed over the past month. His comments, which gave no indication that an interest rate cut would come soon, led some economists to push back expectations for the ECB to follow other major central banks and loosen monetary policy. Earlier on Thursday, the Bank of England cut rates for the third time, taking its key rate to five percent.

"The central message is unchanged — that the ECB continues to be concerned about inflation developments over the medium term," said Nick Kounis, an economist at Fortis Bank.

"All this suggests the ECB will remain firmly on hold in coming months, and that the door for rate cuts remains closed."

Euro zone inflation hit a record 3.5 percent in March, despite the dampening effect of the strong euro.

The common currency has been strengthening as the US economy has worsened and jitters have persisted on financial markets, and reached a fresh high against the dollar yesterday.

Trichet said short-term upward pressure on inflation remains strong and has increased of late.