Krugman interview

THE European Central Bank needs to move quickly to reduce interest rates, if the threat of deflation in Europe is to be lifted, according to one of the leading economists in the US. Prof Paul Krugman, speaking to The Irish Times in advance of speaking at the IBEC national conference next Thursday, forecasts that the ECB could reduce its key interest rate from 3 per cent now to close to 1 per cent over the next two years, as it bids to boost economic growth across Europe. This would lead to further substantial falls in the rates charged to borrowers in Ireland.