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Lizard
15-01-09, 15:44
ECB cuts rates by 50 points to 2%

By Ralph Atkins in Frankfurt

Published: January 15 2009 12:47 | Last updated: January 15 2009 13:24

Eurozone interest rates have been cut by a half percentage point to a three-year low amid rising concerns about Europe’s economic downturn.

The announcement by the European Central Bank, cutting its main policy interest rate from 2.5 per cent to 2 per cent – the lowest since late 2005 – highlighted how its fears about the downturn have grown in recent weeks.

Like other central banks around the world, the ECB announced dramatic cuts in official borrowing costs late last year. But policymakers had given little guidance ahead of Thursday’s meeting and had deliberately kept open the possibility of leaving interest rates unchanged or announcing only a small cut.

ECB ratesJean-Claude Trichet, ECB president, had signalled wariness about taking interest rates too low. In December he argued that the effects of cuts already announced and of government rescue plans should be allowed to work through.

But the weight of economic data that suggest that the recession will be deep and protracted appears to have forced a change of mind.

Economists had generally expected a half percentage point cut at Thursday’s meeting, with some arguing more was needed to revive economic growth.

“The latest monetary policy step is in line with market’s expectations, although recent hawkish remarks by the central bank would also have justified a smaller reduction,” said Jörg Radeke, economist at the Centre for Economics and Business Research. “However, that the bank opted for the full 50 basis point reduction shows the European Central Bank is deeming strong action necessary in order to support the ailing eurozone economy.”

The 16-country eurozone is now known to have suffered a massive economic jolt late last year, in the wake of September’s collapse of Lehman Brothers, the US investment bank. Industrial production plunged in November, with some countries reporting year-on-years falls in excess of 10 per cent. German gross domestic product may have contracted by as much as 2 per cent in the final quarter, the country’s statistical office warned this week.

At the same time, eurozone inflation has dropped rapidly. Ahead of the ECB’s announcement, December’s inflation rate was confirmed at 1.6 per cent – the lowest for more than two years.

The ECB is more concerned about longer-term inflation trends. Unlike in the US, financial markets have not priced in deflation in the eurozone – but they do expect inflation to be weak for some time. The ECB aims to keep the annual eurozone inflation rate “below but close” to 2 per cent.

On average last year, eurozone inflation was 3.3 per cent – by far the worst year since the launch of the euro in 1999.

Copyright The Financial Times Limited 2009


http://www.ft.com/cms/s/0/0f1cc64c-e2f5-11dd-a5cf-0000779fd2ac.html?nclick_check=1


Questi sono matti...

-Duca-
15-01-09, 17:46
bene, mi sa che oggi comprerò un po' di oro, in questi ultimi 3 giorni è sceso molto.. di solito quado inflazionano sale

(Controcorrente (POL)
15-01-09, 18:58
sono proprio curioso di vedere a che servirà...

-Duca-
15-01-09, 22:22
manca l'ultima bolla! come farsela sfuggire??