Economists say ECB will leave interest rates unchanged

Economists believe the European Central Bank will leave interest rates unchanged at its meeting on Thursday.

Thirty one out of 34 economists polled by AFX News and Agence France-Presse expect the ECB to keep the rate at 4.5%.

Of the other three, only one forecasts a definite rate cut at the meeting. One predicted a cut on Thursday or at the next meeting on August 2 while the other forecasts a cut at some stage in July or August.

Many economists were expecting a rate cut at the last ECB meeting on July 5.

But the council left rates unchanged and ECB president Wim Duisenberg indicated they could remain fixed for some time.

This was interpreted by many economists as meaning that rates could stay the same until after the ECB's summer recess. After the August 2 meeting, there is a four-week interval before the council meets again. Many now see this meeting as the most likely timing for a rate cut.

The majority of economists polled - 26 of the 34 - see the rate being cut to 4% or 4.25% by the end of 2001.