The ECB's quarter-point interest-rate cut will be a welcome development for the Irish economy, leading to a positive impact on consumer and producer confidence.

And in almost clichΘd central banker mode yesterday, ECB president Mr Duisenberg made clear that future rate cuts are on the cards, but gave little clue as to the timing of such cuts. Depending on how you read his words, more reductions are imminent, or they are not. As Fed chairman Mr Alan Greenspan remarked some years ago if you thought he had made himself clear there must be some mistake.

Most analysts had expected Mr Duisenberg to take the opportunity to warn that the Bank was back in a "wait and see" mode and that no further reductions could be guaranteed.

But according to Mr Jim Power, investment director at Friends First, he made little effort to dampen expectations of further rate cuts.

As a result, he says two further quarter-point reductions are likely before the end of the year.

That would leave base interest rates at 3.75 per cent, a level which will spur confidence and economic growth across the euro zone.

But Mr JosΘ Luis Alzola, of Schroeder Solomon Smith Barney in London, argues the ECB clearly wanted to dampen expectations of another rate cut very soon.

He said Mr Duisenberg warned that consumption is expected to pick up in coming months, as falling inflation and tax cuts boost real disposable income, while financial conditions remain favourable. The ECB president added that the new level of interest rates is appropriate to maintain price stability in the medium term.

"These two statements clearly indicate that it is not the ECB's intention to lower rates again very soon. Indeed, after a question, he said that there is no policy bias going forward," said Mr Alzola.

However, he still expects another rate cut towards the end of this year, with a further reduction next year.

For the moment, the existing rate reductions will of course feed into lower mortgage repayments and are good news for homeowners.

However, they are likely to do little to boost the housing market itself which appears now to be linked more to the fortunes of the economy overall - and particularly the tech sector.

However, if the interest rate cut does boost confidence sufficiently in Europe, US multinationals may be less likely to cut jobs in operations here that supply the European market. That would be good news, not only for homeowners but for all employees and the economy as a whole.

The background to the rate decision is also quite positive for European economies.

According to Mr Duisenberg, there are clear signals of lower inflationary pressures and last year's build-up of price pressures is proving to be temporary. That has to be good news for businesses and consumers in this State and across Europe. It has also reduced wage expectations across the euro zone.

However, the ECB has now implicitly recognised that the US downturn is set to be far more prolonged than previously believed. This has been clear to many for some time, but it is good that the ECB has now recognised it. A serious problem would arise if the downturn proved to be more prolonged than observers predict.

The ESRI, among others, assumes it will recover towards the beginning of next year, and if not, the assumption that Ireland is set for a soft landing would be called into question.

Adjusting European interest rates is not something which will address this scenario.