ECONOMIC OUTLOOK: BANKING FEDERATION CUTS GROWTH FORECAST.

However, in spite of this pronounced downturn, the FBE warns against excessive pessimism, pointing out that a growth rate of 2.4% is still close to potential Euro-zone growth. This is estimated by Commission services at between 2.5 and 3% and by the ECB at between 2 and 2.5%. The FBE says that growth in Europe will be higher than in the United States, estimated at 1.7%.Inflation.As regards consumer prices, forecasts have been revised upwards to 2.3% in 2001, a rate above the inflation target of 2% set by the European Central Bank to guarantee price stability. The revised figure takes account of the cumulative negative effects of high food and oil prices, the weak Euro exchange rate and the possible impact of the introduction of Euro-denominated notes and coins. The FBE argues that continued wage moderation remains of the utmost importance to keep inflation in check, and assuming this would be the case, suggests that inflation could fall back to 1.9% in 2002.Monetary policy.Given the prevailing growth and price...