ECB likely to cut rates

The European Central Bank (ECB) looks certain to cut interest rates when it meets next Thursday, following news that euro-zone inflation eased and consumer confidence diminished during November. The Republic was among the states where sentiment declined most sharply.

Numbers released by EU statistical agency Eurostat suggest that inflation moved down from 2.3 per cent in October to 2.2 per cent this month. The figure is based on early returns from Germany, Italy and Belgium, as well as indications on energy prices.

Despite remaining above the ECB's targeted ceiling of 2 per cent, the downward trend in the data is likely to provide some comfort for the bank, which has long concentrated policy on bringing inflation lower.

The Bank's intention to cut will also be strengthened by European Commission data showing that consumer confidence across the euro zone hit a five-year low in November. ECB officials had said earlier that a rate cut could help boost morale among euro-zone households.