Sunday, June 3, 2012

ECB May cut rates as eurozone crisis deepens

FRANKFURT — The European Central Bank may cut interest rates again soon as the eurozone debt crisis deepens, but it will continue to insist that it is up to governments to find a lasting solution, analysts say.

ECB watchers predict the central bank -- which will hold its regular policy-setting meeting next week on Wednesday instead of Thursday owing to a public holiday -- will not alter borrowing costs just yet this month.

But it could act in July as deepening fears about Greece and possible contagion to other countries push the 17 countries that share the euro back into recession, the analysts predicted.

"The further escalation of the eurozone crisis has intensified the pressure on the ECB to take further remedial action," said Capital Economics' chief European economist Jonathan Loynes. Read More