Banks expect ECB to reduce main interest rate

04/24/2013 | Bloomberg · Reuters · Financial Times (tiered subscription model)

Royal Bank of Scotland, UBS, Nomura and other banking giants expect the European Central Bank to lower its benchmark interest rate next week amid economic weakness in the eurozone. "The disappointment from the latest data increases further the downside risks to the ECB's baseline scenario and increasingly challenges the pace of the gradual recovery expected," Nomura economist Nick Matthews said. "We see the mention by [President Mario] Draghi that the ECB 'stands ready to act' as a clear statement that the ECB is prepared to cut next month."

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