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    Trichet hints at rate cut on push from European firms

    HotNewsTurkey with wires
    27.10.2008 - 17:06 | Son Güncelleme:

    European Central Bank president Jean-Claude Trichet says a cut in interest rates next month is "a possibility", as European businesses press the bank for interest rate cuts to cushion the downturn, the AP reported on Monday.

    Such a cut is an option for the central bank because of a decline in inflationary pressure, due among other things to lower prices for commodities like oil, Trichet said at a luncheon in Madrid for business leaders, AP reported.

     

    The ECB has already joined the U.S. Fed and other central banks in cutting its key rate a half-point to combat the world financial crisis.

     

    Trichet said an interest rate cut from the current 3.75 percent in November "is not a certainty. It is a possibility".

     

    European businesses urged governments on Monday to ensure a continued flow of credit to the sharply slowing economy and called for near-term European Central Bank interest rate cuts to cushion the downturn.

     

    "European governments must ... ensure a continued flow of credit to the economy," BusinessEurope, which represents some 20 million European firms, said in a statement.

     

    "The business community expects the ECB to consider in coming months all available options, including further interest rate cuts, in order to attenuate the economic impact of the crisis while maintaining price stability," it said.

     

    Photo: AFP

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