European Central Bank president Mr Wim Duisenberg has all but ruled out an interest rate cut before the ECB takes its summer break, but not all bank watchers believe him.
The ECB has unexpectedly changed its mind before, say the doubters, and a sizable minority of economists in a
Reuters
poll still forecast a quarter percentage point cut by August 2nd, the last meeting before the four-week recess.
At the other end of the spectrum, a handful of economists believe an agonisingly slow fall in euro zone inflation means the ECB will leave its refinancing rate at 4.5 per cent until next year.
But views are clear-cut for the ECB's next council meeting on July 19th. Only two of the 50 respondents in the poll predicted a cut next Thursday, and the median forecast was for 75 per cent likelihood of no change.
Thereafter opinions are divided. Altogether, 38 forecast no cut before the ECB returns from its break on August 30th. But 11, more than a fifth, thought the ECB would move by August 2nd, despite the strong hints from Mr Duisenberg to the contrary.
Twenty-one economists predicted a cut immediately after the break on August 30th, and most of the others saw a move in September.