February 08, 2008	Friday	Muharram 29, 1429

FRANKFURT, Feb 7: European Central Bank president Jean-Claude Trichet underscored “unusually high” uncertainty about eurozone growth prospects on Thursday as the ECB opened the door to a possible rate cut in the months to come if necessary.

“Uncertainty about the prospects for economic growth is unusually high” and risks to future momentum had increased the chances of a slowdown, Trichet told a press conference here after the bank left its main rate at 4.0 per cent.

The ECB announced its decision shortly after the Bank of England cut its primary interest rate to 5.25 per cent to support faltering growth in Britain.

Trichet said information available to the ECB suggested growth in the 15-nation eurozone was “close to potential but perhaps on the lower side of growth potential,” which has been identified as two percent.

“I see a number of forecasts around 1.8 percent for the present year,” he added, while stressing he did not personally sign off on that figure.

The bank’s comments were a clear step back from those made a month ago, when Trichet said that a rate cut had not been considered.

This time, he said, “we had no call for increasing rates or decreasing rates within the governing council,” and the decision was a unanimous one.

Many analysts expected the bank to begin lowering interest rates within a few months, once inflation that hit 3.2 percent in January has begun to ease.

Trichet said that keeping medium and long term inflation expectations firmly grounded “is of the highest priority to the governing council,” which has an inflation target of just below two per cent.—AFP