ECB predicts pan-European economic slowdown

The European Central Bank has predicted that the predicted global economic

slow down will hit Europe harder than it expected.

Today it reduced its growth predictions but has given no sign of announcing an interest rate cut. Economic output in the 12 countries known as the Euro zone has been forecasted as only growing by between 2.2 and 2.8% this year, lower then

an earlier forecast that put growth between 2.6 and 3.6%.

The Frankfurt based, ECB has also increased its inflation forecasts, it

says prices could increase by 2.3 to 2.7% in 2001, up from previous predictions

of 1.8 to 2.8%.

Just last week, the ECB voted against a rate cut, which would help relieve inflationary pressures, attributing the decision to the threat of rising prices.