20 Apr 2009

Further rate cut signalled by ECB

8:37 am on 20 April 2009

The head of the European Central Bank has signalled the bank is likely to cut interest rates again, but only by a quarter of a percentage point.

President Jean-Claude Trichet, is reported as saying in Japan that any additional cut would be a very measured one.

The Kyodo news agency also reported that Mr Trichet repeated his view that slashing rates to zero is not at all appropriate in the euro zone.

The ECB interest rate is currently at an all-time low of 1.25%. It has been lowered by three percentage points since October.

Analysts expect the bank to make one final cut to 1% next month.

The euro zone recorded an external trade deficit of 2 billion euros ($US2.62 billion) from a surplus of 1.7 billion euros a year earlier.

The Bank of England held its rate at 0.5% on 9 April.