ECB to resist Franco-German pressure for rate cut

THURSDAY’S European Central Bank (ECB) meeting is unlikely to cut interest rates further, according to leading economists.

The ECB will instead reject political pressure from German Chancellor Gerhard Schroeder and French Prime Minister Jean Pierre Raffarin, who called for a fresh cut in interest rates last week to help boost continental Europe’s sluggish economies.

IIB Bank economist Austin Hughes said a rate cut would be of limited benefit to European economies following the euro’s minor recovery against the dollar, which has seen it fall back from $1.29 towards the $1.24 mark in recent weeks.