ECB to cut lending rate sharply this week

The European Central Bank is set to cut its main lending rate sharply this week as inflation is falling fast and the eurozone economy badly needs a monetary shot in the arm, analyst says.
"We look for the ECB to reduce rates by 50 basis points at its November meeting, and to follow up with a further 50 bp cut no later than January," Bank of America senior economist Holger Schmieding said.
That would take the rate from 3.75 percent at present to 3.25 percent.
"The receipe for aggressive rate cuts is complete in our view," UBS economist Sunil Kapadia added.
The 15-nation eurozone economy is slumping heavily, with a key purchasing manager's index falling to a record low in October and business confidence hitting its weakest level since November 1993.
The economy contracted by 0.2 percent in the second quarter and would meet the technical definition of a recession if it shrank again in the third.

source news Afp, Frankfurt