The European Central Bank would probably have cut interest rates at its last meeting if they had not already been at the zero limit, European Central Bank chief economist Peter Praet said on Tuesday.
“If we would have had (an) interest rate margin at that time, I am convinced personally that the Governing Council would have decided to cut rates,” Praet said at a forum in Washington. He declined to say how large a cut would have been appropriate.
Praet said the ECB will be taking a hard look at economic weakness at its next policy meeting on Jan. 22, and in particular at signs inflation expectations may be slipping.
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