FRANKFURT (AFX) - The European Central Bank's surprise interest rate cut was probably prompted by increasing concern that the euro zone economy is being negatively impacted by the U.S. economic slowdown, Commerzbank economist Christoph Hausen said.
Hausen said he was surprised by the timing of the interest rate cut, because euro zone inflation remains well above the ECB's 2 pct price stability ceiling. It reached 2.6 pct in March and is expected to rise to 2.8-2.9 pct in April. "I was surprised with the timing considering that the price data -- the CPI -- were clearly above the ECB's 2 pct reference rate. Now it's over 2.8 pct," he said.
"What is decisive in today's move is possibly the very bad figures that came out of Germany recently -- the manufacturing and industrial production figures, particularly," Hausen said.
"I think the ECB has become worried over these latest figures because these showed that the weakness of the U.S. economy is contagious," he said.
"I had expected that the rate cut would come in the next four to six weeks," he said.