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November 16th 2005

ECB rate hike looks increasingly likely

On a quarterly basis, the GDP of the collective Euro-zone economies grew by .6%, which is equivalent to an annualized growth rate of 2.4%. The EU economies were boosted by strong German export growth as well as higher-than-expected French consumption. Meanwhile, oil prices remain at elevated levels, and inflation is rearing its ugly head. Economists will likely point to this news as evidence of an EU-wide economic recovery, and argue that the rising possibility of inflation should impel the ECB to preemptively raise rates. The Financial Times reports:

“The momentum of ECB opinion swinging in favour of higher interest rates now looks unstoppable,” said Julian Callow, an economist at Barclays Capital in London. “We now expect the ECB to raise rates 25 basis points on December 1.”

Read More: Eurozone growth ups chances of rate increase

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Posted by Adam Kritzer | in Central Banks, Economic Indicators | No Comments »

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