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ECB increases interest rates by a further .25%

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  • 07-12-2006 3:19pm
    #1
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭


    The ECB today increased interest rates by a further .25% to 3.5% and signalled its increase will be early in the new year. Today's increase is projected to add between 20 and 50 Euro a month to average mortgage repayments.


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    #2
    miju
    Banned (with Prison Access) Posts: 8,486 ✭✭✭miju


    i think everyone is taking the rise in march pretty much as a gimme but after that what does everyone reckon what way the ECB will go?

    i'll fire out a wild prediction of them leaving it for most of next year with a poss rise in sept and then been left flat for the rest of the year


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    #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Given that they seem to be fixated with inflation- and there is a German VAT rise next week and a French one on the cards for March/April- and employment conditions have firmed up on the continent (French inventory figures which were out on Tuesday reported big run-downs in industrial inventory) I think it is entirely possible that interest rates may rise further and quicker than you suggest. Jean Claude Trichet is also on record as having stated that he personally considered 4.5% to be "normalisation" of interest rates- which could potentially mean another 1% to go.......

    Then again who knows...... The dollar dropping like a stone does no-one any favours....... Time will tell......


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    #4
    conor_mc
    Registered Users Posts: 708 ✭✭✭conor_mc


    As I see it, the ECB want to raise rates higher but events may slow/prevent that. I certainly think they'd like to go to 4%, maybe even 4.5% if they can.

    Contrast that to the wishful thinking of Irish economists (McLaughlin, Hughes et al) who seem to think that the ECB won't raise rates, from an unnatural low, unless events force them to.


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