ECB rate cuts are ‘too little, too late’

THE European Central Bank (ECB), which meets today has been too slow to cut interest rates according to Nouriel Roubini, the New York University professor who predicted the global financial crisis.

“They are wrong, they are doing too little, too late,” Mr Roubini said adding that he believes the bank is making the economic situation worse.

The ECB is expected to keep interest rates on hold when it meets today.

Mortgage holders enjoyed a series of cuts over the last five months. However, it is likely they will have to wait until March before any further cuts are announced. The ECB last month reduced its base-lending rate by half a percent to 2%, matching a record low.

After the announcement ECB president Jean-Claude Trichet was his usual guarded self at the press conference, but economists said it was significant that he didn’t rule out the possibility of further rate cuts.

He emphasised that 2% was not necessarily the lower limit for rates and indicated that the March meeting would be “an important rendezvous”.

Most Irish banks have moved to pass on the cuts to mortgage holders although a number of banks are not passing on the full rate cut on some products.