Further interest rate cuts may be on the cards next week following this weekend's meeting of the Group of Seven finance ministers in Washington. French finance minister Mr Laurent Fabius stressed governments would be willing to do their part to help the ECB lower rates further. "It's not only a question of the shock of recession but the shock of uncertainty. Uncertainty is the basis of the slowdown of the economy, therefore we have to try to bring more certainty into the system," he told CNBC.

He added that the European Central Bank (ECB) had taken decisions but there were "probably now new margins for action, and we shall examine that" he said. "As far as Europe is concerned, we are sticking to our rules and our rules are that, in the mid-term, one must have balanced budgets. But it doesn't mean we have not got any margin for action right now."

The signal to the ECB was clear - governments would not let budgets and deficits rise excessively and inflation was now less of a reason for the ECB to avoid rate cuts. "The ECB must give margins for ... better growth. I think obviously there is no risk of inflation right now."

Comments for Bundesbank president this week Mr Ernest Welteke were also seen as clearing the way for rate cuts. He said that the attacks on the US had greatly increased economic uncertainty.

According to a Reuters survey carried out this week, 28 out of 46 economists said the bank would cut rates to 3.5 per cent on October 11th. If there is no move next Thursday, 22 expect the ECB to cut later in October and 17 said it would wait until November.

All but 12 of the economists surveyed expected the ECB to deliver at least two more rate cuts this year - 28 saw ECB rates at 3.25 per cent by the end of the year, four saw them at 3 per cent and one forecasts 2.75 per cent.

Mr Fabius added that the EU wanted to stimulate economic growth but did not have room in its budgetary procedures to mirror stimulus in the US. Economic stimulus policies would be a core subject of the G7 summit, he said. However, later German finance minister Mr Hans Eichel said G7 finance ministers would not discuss a joint package to stimulate the global economy when they met in Washington.