The European Central Bank is closer to lowering interest rates than at any time since it last cut them in July 2012 and is likely to shave a quarter-point off at its policy meeting next week.
Senior sources involved in the deliberations say momentum is building for action to help a euro zone economy which has slipped back into recession, a move that some policymakers wanted to take earlier this year.
Inflation sliding well below target gives the bank scope to act and a senior ECB official said even Bundesbank chief Jens Weidmann, the most hawkish member of the 23-man Governing Council, had an open mind.
After the bank’s last monetary policy meeting on April 4, ECB President Mario Draghi signaled that a cut could come soon when he said that the bank stood “ready to act” to boost the recession-hit euro zone economy.
“Now we are free,” one senior ECB official said. “For the next meeting in Bratislava, I would look at rates, certainly.”
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