Economic plight affects EU move on Ukraine

The European Central Bank (ECB) has cut interest rate to 2.5 per cent, even as ECB Governor Christine Lagarde admitted that there was a lot of uncertainty surrounding the economic situation.

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She was responding to the question whether there would be further cuts in the interest rate. Explaining the decision to cut the interest rate, Lagarde said, “It (the decision) was made as a result of substantive discussion all around the table on the state of the economy, on the projections, on the risks that we are facing, and the decision was a consensus and no one opposed the decision.”

During the press conference, she had however admitted that there was one abstention. About the prospects of a future rate cut, she said, “If the data indicates to us that in order to reach destination, the appropriate monetary policy should be to cut, we shall do so. If, on the other hand, the data indicates that is not the case, then we shall not cut and pause. So that's really where we are - not pre-committing, being data-dependent as ever, and deciding on meeting-by-meeting basis.”