Inflation in the eurozone may have eased in November from the six-month high hit the previous month, Eurostat said today In its flash estimate of consumer prices in November, the statistics office said annual inflation is expected to have declined to 2.2pc from 2.3pc in October. The European Central Bank has left its key lending rate unchanged at 3.25pc for the past 12 months, but is expected to lower rates by as much as 50 basis points at its meeting next week due to a more benign outlook for inflation ECB council member Ernst Weltke said this week that if the medium term outlook for prices improves, "we possibly could take an interest-rate step to improve the general climate, maybe even psychologically"
According to Niall Dunne, economist at Ulster Bank, the "psychological" impact of a cut is key "If we're talking about psychology, well then the question to ask is: what psychological impact would a 25 basis point cut have? In my opinion, very little, so this comment now points to a 50 basis point cut," he said today //www.fxcentre.com