US business tax cut 'could erode Europe's tax base'

Economists at the European Central Bank (ECB) have said the US corporate tax cut should lift the world's largest economy in the short term - but warned that it could erode the tax base in European countries by intensifying global competition for lower rates.

ECB economists said the cut in business taxes will provide a "significant fiscal stimulus" to growth in the US in the short term. However, it warned that long-term effects were less clear, especially if the cut leads to larger US budget deficits.