August 25, 2014 / 1:06 PM / 3 years ago

Bank of Israel cuts benchmark rate to 0.25 pct, all-time low

JERUSALEM, Aug 25 (Reuters) - The Bank of Israel lowered its benchmark interest rate to an all-time low of 0.25 percent from a previous 0.5 percent on Monday, its second straight monthly reduction aimed at boosting economic growth.

All 10 economists polled by Reuters had forecast no move, which came amid a seven-year low in the inflation rate and data showing Israel’s economy was weakening.

Growth is forecast at 2.9 percent in 2014 but the central bank has said the Israel-Hamas war could shave a half point off of that figure. In the second quarter, the economy grew an annualised 1.7 percent, well below expectations.

Israel’s annual inflation rate eased to 0.3 percent in July - below the government’s target range of 1-3 percent - with some policymakers blaming weak consumer demand for the benign inflation. (Reporting by Steven Scheer; Editing by Toby Chopra)

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