ECB rate cut should come as no surprise

A series of weak data releases, corresponding stock market declines across Europe and the United States as well as a cut in interest rates by the Federal Open Market Committee has fuelled speculation that the European Central Bank must soon follow suit.

The ECB has so far resisted rate cuts in 2001, keeping its minimum bid rate at 4.5 per cent, despite monetary loosening in both the United States and the UK. However a number of ECB governors have made dovish comments this week, substantiating