The European Central Bank (ECB) has cut interest rates for the second time in four months today, lowering them by 25 basis points to 2.5pc. The bank last cut rates in December 2002, slashing borrowing costs by 50 basis points, and many analysts had expected another 50 point cut today. Earlier, the Bank of England left its repo rates unchanged at 3.75pc following its unexpected decision last month to lower rates by 0.25pc.
ECB president Wim Duisenberg will hold a press conference at 1330 to explain today's decision. Analysts who had forecast a 25 basis point cut said that the central bank should hold off cutting by 50 basis points before assessing the economic impact of a potential war in Iraq. Following the announcement, the euro was trading at USD1.0954 against the dollar, marginally down since this morning but off its lows, and at 68.27p sterling///www.fxcentre.com