ECB 25 basis point drop forecast

THE European Central Bank could cut rates by a quarter of a percent in the first half of this year, according to one of the country’s leading economists.

Goodbody Stockbrokers chief economist Dermot O’Leary said he expects an interest rate cut of 0.25% in June this year but if the market turmoil continues he said the cut could come before that.

“The ECB is still very concerned about inflation, which is running over 3% and well above its 2% target. I think it will wait for the rate of inflation to come down before it makes adecision on interest rates,” he said.