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ECB Seen Desisting From Further Rate Cut Until 2015




The European Central Bank will refrain from cutting its interest rate again until at least 2015, according to economists surveyed since President Mario Draghi ’s pledge last week to deliver another reduction if needed. The Frankfurt-based central bank will leave its main refinancing rate at a record-low 0.5 percent until the end of 2014, according to the median of 18 forecasts in the monthly Bloomberg survey of economists. The same survey shows that 27 of 32 economists predict no cut in the benchmark by the end of 2013, while five see a reduction to 0.25 percent. Draghi said on May 2 that the ECB remains ready to act again after it lowered its key rate by a quarter-point the same day.



While economists in today’s survey reduced forecasts for euro-region gross domestic product this year, data suggest the 17-nation zone may return to growth after industrial production and factory orders in Germany both jumped more than forecast. “I don’t expect another ECB rate cut,” said Marco Valli , chief euro-area economist at UniCredit Global Research in Milan. “Inflation will move closer to 2 percent again and we will see moderate economic growth in the second half of this year.” The euro fell 0.1 percent today after erasing earlier gains, and traded at $1.3140 as of 12:14 p.m. in London . Korean Cut Following the lead of the ECB and policy makers in Australia and India this month, the Bank of Korea cut interest rates today as strength in the won and weakness in the yen dim the outlook for the nation’s exports. The South Korean seven-day repurchase rate fell to 2.5 percent from 2.75 percent. The U.K. interest rate will stay unchanged at 0.5 percent until at least the end of 2014, according to all but two of 19 […]



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