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1/8/06

Strong European economy ups rate rise odds

The Financial Express

Strong European economy ups rate rise odds

AMSTERDAM, JAN 8: The chances of a further European interest rate hike will increase as the European economy strengthens, European Central Bank Governing Council member Nout Wellink said on Dutch television on Sunday. The European Central Bank raised rates by 25 basis points to 2.25% on December 1 in its first increase in five years, defying protests from politicians, trade unions, businesses and banks, saying inflation risks had grown amid stronger signs of an economic recovery. When the ECB Governing Council meets on January 12, it is expected to hold monetary policy steady at 2.25 %, according to a Reuters poll of 59 economists, although they do forecast the ECB’s next rate hike will come by March.

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