The Central Bank has decided to only lower its interest rates by 1% down to 12%.

The business sector and households are expressing deep disappointment with this decision as the slow and painful death by interest rates continues.

Arnor Sighvatsson, Chief Economist of the Central bank says that the circumstances had not allowed for a sharper cut. The development in the economy has not been as hoped in the beginning of May. There is still no success in negotiations between the business sector and the unions, the banks’ balance sheets have not been established, the IceSave negotiations have not been concluded and the government’s plan for budget cuts have not been published.

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