BRUSSELS - THE European Central Bank cut its 2008 inflation forecast on Thursday to 3.3 per cent from 3.5 per cent previously and slashed its 2009 estimate to 1.4 per cent from 2.6 per cent.

'Looking forward, commodity prices and weakening demand lead us to conclude that inflationary pressures are diminishing further,' ECB president Jean-Claude Trichet told a news conference in Brussels.

The ECB strives to keep annual inflation close to but less than 2.0 per cent. -- AFP