The European Central Bank (ECB) council convened today amid expectations it will keep interest rates steady after bank president Mr Wim Duisenberg said the bank was in no rush to ease after terror attacks in the United States.
But in the face of uncertainty over the economic impact of the disaster, only a few economists were ready to rule out a cut after the ECB and other central banks pledged to do what was necessary to soothe jittery financial markets.
Whereas only last week markets were virtually certain the ECB would keep rates on hold after cutting its benchmark rate by a quarter point just two weeks ago, they now saw a 33 per cent chance the ECB might move again.
The ECB is due to announce its rate decision at about 12.45 p.m. No news conference is scheduled after this week's meeting.
Tuesday's attacks on New York and Washington sparked fears the psychological damage could push the global economy into recession, sending world stock markets into a tailspin and oil prices spiralling.
The Group of Seven major industrial countries said yesterday their central banks were standing by to provide liquidity to financial markets if needed and they would monitor economic developments closely.
Mr Duisenberg, speaking before a European Parliament committee on Wednesday, acknowledged the attacks could have long-term financial consequences but said that it was too soon to judge their impact.
He also said it would have been "counterproductive" for the ECB to be rushed into any hasty move. "I think it is far too early to judge what the events of yesterday will have for an impact on the medium-term developments," he said.
Mr Duisenberg also said current interest rates, with the benchmark rate now at 4.25 percent, were not standing in the way of economic growth and that the 12-nation single currency area was not facing a recession.