The European Central Bank or ECB has cut interest rates by .75 percent, the largest cut ever. This record cut was greater than expected. The current ECB’s rate now stands at 2.5 percent. This cut comes as the Euro zone inflation plummets and economy continues to be in a recession The Swedish central bank has also lowered its key interest rate by 1.75 points to 2 percent.
The ECB’s chief expects the Euro zone to continue to be in a recession, shrinking by .5 to 1 percent. The forecast for inflation is expected to be about 3.3 to 3.5 percent in 2008 and the estimation for 2009 is 1.4 to 2.6 percent.
Analysts predict that interest rates could decrease to 1.5 percent by March in hopes of boosting the economy.
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