Business news for Thu, 29 Nov 2007 & with words economists+rate. 4 news.

A clutch of Europe's top economists have called on the European Central Bank to cut interest rates at its policy meeting next week, warning of severe downturn unless confidence is restored quickly to the banking system.

WASHINGTON (MarketWatch) - Builders slashed prices at the fastest pace in 26 years in October, boosting sales of new homes from a much lower level of sales in September than was originally reported, according to Commerce Department data released Thursday. Sales rose 1.7% to a seasonally adjusted annual rate of 728,000 in October from a downwardly revised 716,000 in September, which was a 11-year low. September's sales pace was originally reported as 770,000. August's sales were also revised sharply lower to 717,000 from 735,000 estimated a month ago, and 795,000 estimated in the first release. Sales are down 23.5% in the past year. The October sales pace was much weaker than the 740,000 expected by economists surveyed by MarketWatch.

Economists have reacted with shock to higher-than-expected producer inflation data, which almost certainly seals the case for a December interest rate hike.

The continued strong rises in credit extension have made chances of an interest rate hike next week an almost assured fact, say economists.