The chief economists of the European Banking Federation say they have cut their outlook for euro zone growth in 2001 and 2002 to respectively 2.4 and 2.7 per cent.
In a statement today the federation said the economists' forecasts for inflation this year had been increased to 2.3 per cent, while inflation in 2002 was put at 1.9 per cent.
The previous forecasts were not immediately available.
"The inflation outlook is seen to be very uncertain as the forecasts of the individual chief economists range from 1.8 per cent to 2.6 per cent this year and 1.7 to 2.4 per cent next year," it said.
The statement said most of the economists expected the European Central Bank to cut interest rates once again before the end of 2001 by a quater of one per cent.
It noted however, some economists did not expect any further ECB cut due to "inflationary dangers" linked to upward rounding of prices with the launch of euro notes and coins in 2002.
The federation warned against "underestimating this effect", noting it could be in the order of 0.4 to one percentage point.
It said the present weakness of the euro reflected all the mentioned difficulties facing the euro area economies, adding it expected the euro to close the year roughly where it ended 2000.