ECB hints at interest rate cut

The European Central Bank could cut interest rates again at its next meeting on November 6.

That is according to its President, Jean Claude Trichet, who told a conference in Madrid that weakening economic growth was easing inflation fears.

But Trichet added that the ECB would only ease rates further from the current 3.75% if it felt the inflation outlook warranted the move: “It is possible that we would decrease rates again in the occasion of the next meeting of the Governing Council,” he said.

Hints of ECB rate cuts will be welcome news for EU businesses. The Brussels-based forum Business Europe has been calling for cuts to cushion the effects of the economic downturn.

The group has already revised its growth figures significantly downwards:

“Our forecast for growth next year has been revised significantly downward. Now we expect EU growth to reach 0.4 percent next year and 0.2 percent for the euro area. We are expecting next year close to one million jobs being lost in the EU as a whole in the EU 27.” said chief economist Marc Stocker.

Meanwhile, EU economists have gone one step further and are already warning of a coming recession across the Eurozone.

Figures due to be published this Thursday by Eurostat look set to confirm the fears, and are likely to reinforce calls for interest rate cuts.

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