Now the interest rate in england is due to drop in 2008, do you thing that the rates will also drop in europe?

Answer 1

Unlikely. The ECB has been extremely slow to react to pressure on rates in the past, if for no other reason than that the requirements of the local economies in the Eurozone are all quite different from each other, and very different from the UK. In general Eurozone residents have not consumed credit to the degree that is common in the UK, so maintaining rates at current levels doesn't have the same risks of widespread default. On the other hand lower rates would bring about the risk of higher inflation at the very time that oil prices and wheat shortages are likely to cause inflation of their own.

Answer 2

Most likely yes ...