The Bank of England took the markets by surprise today by cutting interest rates by a quarter of 1 per cent to 5 per cent.
Meanwhile, the European Central Bank has held its main interest rate at 4.5 per cent.
ECB president Mr Wim Duisenberg has made it clear that the central bank, which controls interest rates for the 12 nations that form the euro-zone, will not move on rates until inflation slows.
However, the ECB is expected to make its second rate cut this year when it meets after its summer break on August 30th.