Trichet must now raise rates again Jean-Claude Trichet, European Central Bank president, today confirmed what markets had been expecting: a 25 basis point rise in eurozone borrowing costs, to 1.25 per cent. Mr Trichet will now face criticism for raising rates too early. But the doves are wrong: a raise in rates could not have waited any longer, and more must now follow.
The economic case for returning rates to normal levels rests party on the eurozone growth outlook. Following its 2009 slump the zone’s economy rebounded quickly in 2010, and is now set to grow next year at close to its (albeit significantly reduced) rate of potential, at between 1.5 and 2 per cent.
http://link.ft.com/r/WDI4RR/FXZAGU/18GC39/40LR79/FX2EIQ/LE/h?a1=2011&a2=4&a3=7
Posts
No comments:
Post a Comment