News Column

Brighter European outlook weighs against rate cut

May 7, 2014



FRANKFURT, Germany (AP) A modestly brighter economic outlook has analysts thinking the European Central Bank will probably not deploy more stimulus measures for the 18 countries that use the euro currency.

The bank's 24-member rate-setting council meets Thursday in Brussels.

Several analysts are saying the bank won't act before June's meeting if at all.

ECB President Mario Draghi says the bank is ready to provide stimulus if things start looking worse. That could include a cut in the bank's benchmark interest rate from the record low 0.25 percent, a negative deposit rate for banks, or even bond purchases.

Inflation remains low at 0.7 percent, a sign of slack. But recent surveys suggest the modest recovery is gaining strength. Unemployment has fallen slightly but still stands at a high 11.9 percent.


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Source: Associated Press


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