Economists are predicting that the European Central bank will almost certainly cut interest rates on Thursday, after its president, Wim Duisenberg, acknowledged that inflationary pressures were easing while growth prospects remained poor.
Analysts say his remarks sent a clear signal that a rate cut was imminent when the ECB's governing council convenes for its monthly meeting. Duisenberg's comments came after other leading bankers voiced similar thoughts. Bundesbank President Ernst Welteke said last week that the ECB meeting will "certainly discuss whether the time has come for a rate cut and if so, whether rates should be cut by a quarter or half a point."
He added that a rate cut could "create a better climate psychologically."