Europe’s Central Bank Weighs Rate Cuts

European Central Bank policymakers may struggle to find consensus on cutting interest rates this week as council members differ on prospects for an economic recovery this year, economists say.

ECB President Wim Duisenberg said Feb. 22 that he no longer expects a rebound this year, leading investors to bet on a rate cut at the council’s next meeting. Three days later, Bank of France Governor Jean-Claude Trichet forecast a “significant” recovery by the end of this year.

The euro-region economy may contract this quarter after growing at its slowest pace in almost a decade last year, the European Union has said.

Nineteen of the 25 economists surveyed by Bloomberg News say the ECB will lower its benchmark refinancing rate by at least a quarter point from 2.75%. Fourteen say the cut will be as much as 50 basis points.