Analysts agree interest cuts in Eurozone are on the way

INTEREST rate cuts in the Eurozone are on the way next month most market analysts agree, but differ on whether the cut will be 0.25% or 0.5%.

Ulster Bank Financial markets economist, Niall Dunne said market watchers will spend most of their time in the coming week trying to interpret further comments from the European Central Bank (ECB) on the scale of a rate cut that is now almost universally expected on December 5, the day after the Budget.

“ECB council member Ernst Weltke added further to the comments of Issing and Duisenberg over the weekend, and really all the market is asking now is: how big will the rate cut be? In Ulster Bank’s dealing room, the consensus is for a 50bps or 0.50% cut. I’m not yet entirely convinced that it will be 0.50%, but it certainly will be 0.25%. The comments have been by, ECB standards, so explicit, to risk disappointing the market now would destroy any credibility the bank has left,” said Mr Dunne.