Commerzbank Says ECB to Lower Benchmark Twice Through Early 2012

Commerzbank AG said it now expects the European Central Bank to lower its benchmark interest rate in the fourth quarter of 2011 and in the first three months of 2012 as the euro-region economy slides into a recession.

Euro-region gross domestic product may stall in 2012, said Joerg Kraemer, an economist at the Frankfurt-based bank, in an e-mailed note today. He had previously forecast an expansion of 0.8 percent. The ECB will probably lower its key rate to 1 percent over the coming months from a current 1.5 percent, as the economy “will probably slip into a recession,” he said.

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