Wednesday 21 February 2018

Thomas Atkins: ECB focus on interest rates and possible cut

ECB President Mario Draghi
ECB President Mario Draghi

FOR the first time in months, the European Central Bank's main focus at this week's policy meeting will be interest rates and whether they can be reduced to support a recession-bound euro zone economy.

A month after unveiling a potentially unlimited programme of bond-buying which only countries themselves can activate, the bank has little more it can do in the euro zone's debt crisis other than sit and wait for Spain to ask for help in taming the upward market pressure in its borrowing costs.

Officials have expressed enough concern about euro zone inflation, still above its target of just below 2pc, to convince financial markets they will hold off another cut in interest rates, already at a record low of 0.75pc.

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