ECB surprises analysts and CUTS interest rate to 0.25%

Graham_Devon

The European Central Bank (ECB) has cut its benchmark interest rate to a record low of 0.25%, down from 0.5%.

The move came as a surprise to many analysts.

ECB president Mario Draghi said the decision to cut rates reflected an outlook of low inflation and economic weakness in the eurozone.

Inflation in the eurozone fell to 0.7% in October - its lowest level since January 2010, stoking concerns of deflation in some countries.

Prices in Greece - one of the eurozone members worst hit by the economic crisis - have not risen since July. Some economists are also worried about deflation in Spain.

The ECB's target is to keep inflation just below 2% - seen as a healthy level for economic growth.

Biggest interest rate news we've had for a while!

http://www.bbc.co.uk/news/business-24851483

Jonbvn

Well that put about 2c on the £/Euro exchange rate.

ILW

Do they really have any idea what they are doing?

Jonbvn

ILW wrote: »

Do they really have any idea what they are doing?

Is that a rhetorical question?;)

grizzly1911

ILW wrote: »

Do they really have any idea what they are doing?

Perhaps it is time for the slaves to become masters?

ILW

grizzly1911 wrote: »

Perhaps it is time for the slaves to become masters?

Probably be even worse, would just end up fighting with each other.
Put the slave is charge and you get Somalia

wotsthat

Graham_Devon wrote: »

ECB surprises analysts and CUTS interest rate to 0.25%

Can't trust them analysts. Bloomberg polled 70 analysts and only 3 called this. Strange really because deflation has been on the agenda for some time - Eurozone inflation has been discussed many times here as we wonder whether such deflation will be the nice sort that makes us all magically richer.

Despite the analysts being wrong so often Bloomberg still determine whether company results are good or bad based on whether they are ahead or behind analysts expectations.

michaels

wotsthat wrote: »

Can't trust them analysts. Bloomberg polled 70 analysts and only 3 called this. Strange really because deflation has been on the agenda for some time - Eurozone inflation has been discussed many times here as we wonder whether such deflation will be the nice sort that makes us all magically richer.

Despite the analysts being wrong so often Bloomberg still determine whether company results are good or bad based on whether they are ahead or behind analysts expectations.

May be the analysts thought that a cut from .5% to .25% will make f all difference to the real economy and thus is not worth doing - fogetting that the Central Bankers want to be 'seen to be doing something'

wotsthat

michaels wrote: »

May be the analysts thought that a cut from .5% to .25% will make f all difference to the real economy and thus is not worth doing - fogetting that the Central Bankers want to be 'seen to be doing something'

I think deflation is becoming a real risk in the Eurozone and whilst .25% is !!!!!! all it's a sign of panic setting in.

ILW

wotsthat wrote: »

Can't trust them analysts. Bloomberg polled 70 analysts and only 3 called this. Strange really because deflation has been on the agenda for some time - Eurozone inflation has been discussed many times here as we wonder whether such deflation will be the nice sort that makes us all magically richer.

Despite the analysts being wrong so often Bloomberg still determine whether company results are good or bad based on whether they are ahead or behind analysts expectations.

I would like some of the nice deflation that will make me richer please.

DiggerUK

It beggars belief that anybody did not see this eventuality. The euro spivs want sugar rushed equity markets, and they are going to get them.
Zirp rates nearly here, all that is needed now is EuroQE, and it does not matter how many times the germans say 'nein,nein,nein' it will happen.
Might be called something else, but it will be QE none the less . Mad, but inevitable.
..._