When is the ECB interest rate likely to rise?

Paulk

Registered User
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I realise that this is speculative, however, given the mess that Greece is currently in, when do you think that the ECB will raise its interest rate?

Clearly, any rise will impact on mortgage borrowers but I'd imagine that the ECB won't raise the interest rate dramatically over the next 3 years?
 
Difficult to say.

The most recent inflation stats from Eurostat are here:

[broken link removed]

[broken link removed]

The ECB's target is close to 2% HICP inflation.

You can see that HICP inflation in the EMU zone has crept up from 0.6% pa last April to 1.5% this April.

This suggests that if HICP inflation keeps rising, the ECB may act by increasing their rates.

Also, the weaker euro will cause import costs to rise, esp. energy costs.

However, the financial crisis and fiscal cutbacks mean econ activity is sluggish, so I don't think the ECB will increase rates until 2011.
 
Even if they do increase rates during 2011, I can't see rates above 3% by end-2011.
 
Soc Gen Lowers ECB Rate Forecast to 1.5% by End of '11 from 1.75% Prior

First Published Thursday, 13 May 2010 from Need to Know News


Soc Gen Lowers ECB Rate Forecast to 1.5% by End of '11 from 1.75% Prior
 
Interest Rate increases...or possibly another cut?

Check out the following article;


ftalphaville

.ft.com/

blog/2010/05/25/242666/libor-life-savers-2/

What do you think?

E
 
Check out the following article;


ftalphaville

.ft.com/

blog/2010/05/25/242666/libor-life-savers-2/

What do you think?

E

That link won't work for me.

I realise that the ECB interest rate has to go up sooner or later but an increase by even .5% could cause havoc in Greece?
 
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