ECB expected to lower rates by 0.25%

THE European Central Bank (ECB) is fully expected to continue reducing interest rates when its governing council meets in Frankfurt on Thursday.

Last month, while visiting Japan, president Jean-Claude Trichet said there was scope for further cuts in the eurozone’s headline interest rate, but warned that any move would not see more than a 0.25% cut and that there was no possibility of the bank cutting rates to zero, as such a move would not be “appropriate” for the region.

The ongoing global economic downturn has prompted the ECB to embark on one of its most aggressive set of interest rate cuts in its 10-year history. The central rate is currently at an all-time low of 1.25% and another cut – most probably lowering it to 1% – is expected to be implemented on Thursday.