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 Listen to the storyA big drop in German manufacturing announced earlier this week is cited as evidence that Europe's most important economy may even be sliding into recession. And the rise of the euro to a four year high against the dollar in currency dealing is a major worry for many European exporters. But the region's central bankers don't appear to share this gloom. Wim Duisengerg, president of the European Central Bank, said there was insufficient data to justify a cut in rates at the present time. And he poured cold water on hopes of a cut next month saying the end of the war in Iraq had reduced the risk of future economic decline. The ECB's decision came as a disappointment to European financial markets - share prices fell sharply - but it wasn't a surprise. The Bank of England had been seen as much more likely to reduce rates in Britain. It didn't, probably because the pound's fall against the euro has pushed up the price of goods imported into the UK, raising the spectre of higher inflation. A rate cut could have added to that risk. Listen to the words Read more about this story |
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