FRANKFURT, March 5 (Reuters) - The European Central Bank still has scope to cut interest rates, Governing Council member and head of the German Bundesbank, Axel Weber, said on Thursday after the ECB cut euro zone rates to a new record low.
"We have now used room to go down. We have not exhausted that," Weber told German TV station ARD.
The ECB cut rates to an all-time low of 1.5 percent on Thursday as expected. The bank's President Jean-Claude Trichet signalled that further cuts were possible but dodged questions on when or how low the bank could go.
The ECB also published new economic forecasts showing a deep and lengthy recession for the 16-country bloc. The bank's staff predicted the euro zone could shrink by as much as 3.2 percent this year, more than three-times worse than it's previous worst case scenario. (For story please click [ID:nL4897767])
Weber added that interest rates needed to be pushed back up as soon as the economic situation improves.
"They should go up again, when the economy shows signs of picking up... naturally are considering that when we see an improvement, then we have to go back up relatively fast," he said. (Reporting by Sakari Suoninen; Editing by Ron Askew)