PARIS (AFX) - The European Central Bank will leave interest rates unchanged at its governing council meeting next Thursday, but a cut in rates is expected later in June or in July, according to a poll of economists by AFX News and Agence France-Presse.
Of 38 economists polled, 34 said they expect the minimum bid rate on the ECB's main refinancing operations to be left unchanged at 4.50 pct at next week's council meeting.
Exane economist Emmanuel Ferry and Tarja Heinonen of Leonia predicted that the rate will be cut to 4.00 pct on Thursday, while David Brown of Bear Stearns said the rate is likely to be cut to 4.25 pct at Thursday's meeting.
Credit Lyonnais forecast a cut on Thursday or later in June. Lehman Brothers, Nordea and 4CAST do not rule out an easing move on Thursday, although they see a later rate cut as more likely. Most economists -- 24 of the 38 -- expect the ECB to cut rates at the June 21 council meeting in Dublin or at one of its meetings in July.
Of the remainder, nine economists expect rates to be cut by the end of the third quarter and one sees rates being kept on hold for the remainder of the year.
Most economists now expect the refi rate to be at 4.00 pct or lower by the end of the year.
Twenty of the 38 predicted an end-year rate of 4.00 pct, two forecast 3.75 pct and one a range of 3.50-3.75 pct. Fourteen forecast that the rate will be at 4.25 pct at the end of the year, with one predicting a 4.50 pct level.