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ECB does not tinker with interest rates, but indicates December rise

by : Thomas Blythe

Date : Thu, 02 Nov 2006 17:08:00 GMT





FRANKFURT - The European Central Bank held the interest rates at 3.25 percent today, but indicated that a hike was possible in December. Analysts had expected the Bank to hold the rates steady following some comments to this effect by ECB President Jean-Claude Trichet last month. lt;br / gt; lt;br / gt; Around 70 economists who participated in a Reuters poll had estimated that the rates would be held steady this month after a raise last month. Jean-Claude Trichet had said at a press conference last month that the Bank would closely monitor the inflation levels, which are at 1.6 percent current after reaching 1.8 percent in September. lt;br / gt; lt;br / gt; "Even more than at the last press conference, I would say nothing that would distract the present market expectations as regards what could happen until the end of the year. That 's absolutely clear, " Trichet told reporters at the ECB news conference. lt;br / gt; lt;br / gt; But he did not offer any comments on what the Bank would do in 2007. "Over and above this next rendezvous that we have (on Dec 7), I would say we will do all what is necessary to ensure price stability... and I will give you no other reference for our posture after our next meeting, " he said. "We will do in 07 exactly what is needed to deliver price stability and be credible in ensuring price stability. " lt;br / gt; lt;br / gt; Markets expect the ECB to raise interest rates to 3.50 percent in December and Trichet has suggested that this may very well happen on December 7.



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