ECB rate cut ‘still a possibility’

A FURTHER cut in European interest rates cannot be ruled out despite warnings rates will fall no further.

Dermot O’Brien, economist with NCB Stockbrokers, said the ECB may be forced to cut rates once more in the coming months, probably in the first quarter of 2004, if inflation falls sharply.

Inflation next year could fall as low as 1% in the ECB economic zone, triggering a further interest rate cut, despite the accepted view that global interest rates have reached the bottom of the cycle and have started to rise, Mr O’Brien said.