The European Central Bank to cut rates in December as more money woes hit

The European Central Bank has indicated that it will cut interest rates once again in December, possibly by half a percentage point.

It is believed a larger rate cut will be counterproductive, with the bank keen to promote certainty and confidence in difficult times.

By contrast, the Bank of England cut rates by 1.5 percent and the Swiss National Bank made a surprise 1 percent reduction.

Since the last ECB cut, the euro zone has dropped into recession. Following that, the outlook has become bleaker: Deflation is now being mentioned more than inflation.

Central Banks, faced with a sudden collapse in growth as well as inflation, have slashed rates and are expected to keep doing so.

However, it looks as if the steady approach will win the day as the ECB comes to terms with the fact that manufacturing and service industries in the euro zone have contracted.

For the new year, analysts predict that euro zone prices will drop, although it looks like deflation will be kept at bay.

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