ECB likely to cut interest rates today

THE European Central Bank is likely to cut interest rates today and offer ultra- long liquidity operations to support banks, while leaving the door open to further measures to fight Europe’s debt crisis if governments agree fiscal reforms.

A Reuters survey of 73 analysts showed a 60% chance the ECB will cut rates by 25 basis points to a record low of 1.0% — a floor it previously reached during the financial crisis in 2009. It cut rates by a similar amount in November.

New ECB president Mario Draghi reinforced expectations for a rate cut last week when he said the bank had a responsibility to ensure inflation did not undershoot its target of just below 2%, not just to stop it exceeding it.