In widely expected interest rates moves, the European Central bank raised interest rates to 3.5% (a 5 year high) and the Bank of England kept rates on hold at 5%.

ECB raises interest rates to 3.5%, whilst the BOE keeps rates on hold at 5%

The ECB's rate rise to 3.5% marked the 6th rise since started tightening monetary policy last December, to keep rising inflation in check, which at 1.8% remains below the ECB target of 2%. Though inflation is expected to pick up as the euro zones growth rate rises to 2.7%. Further interest rates are expected during 2007, though of the the dollar and US economy continue to weaken then this would impact on eurozone growth and make future rate hikes more measured or may even result in a pause at current levels.

The BoE kept rates at 5%, the next move in interest rates is expected in Feb / March 07, with the inflation rate at 2.4% well ahead of the 2% target, and house prices continuing to accelerate, and wage growth also expected to rise in the new year pay deals, it is highly likely that the Bank will raise interest rates again in Feb or March 2007, despite signs of a slowing economy and the effects of the weakening dollar.

Related Articles

Nov 10, 2006	UK Interest Rates set to rise to 5.25% by March 2007
Nov 07, 2006	UK Interest Rates could rise to 5.75% in 2007
Nov 05, 2006	UK Insolvency rise by 55% and on target to hit a record 100,000 for 2006 As interest rates are due to rise to 5% !
Oct 22, 2006	UK Interest Rates Forecast to rise much higher due to rising Inflation and high Money Supply Growth
OcT 17, 2006	UK Inflation rises to a 8 year high of 3.6% (RPI), whilst CPI dips to 2.4%
Oct 05, 2006	BOE Keeps Interest Rates on Hold Whilst the ECB raises to 3.25%
Sept 21, 2006	Interest rates likely to rise to 5% in November 06
August 12, 2006	Interest rate trend uptrend accelerates !
August 05, 2006	Surprise rise in UK Interest Rates to 4.75%
March 07, 2006	Interest Rates Correction is Over
Nov 14, 2005	UK Long-term Interest Rates Trend is still UP

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.