ECB Watch

The Unwelcome Guest · **Posted:** Thu Feb 08, 2007 9:32 am

ECB to leave rates on hold at 3.5%?

Thursday, 8 February 2007 09:18

The European Central Bank is expected to leave interest rates at 3.5% today but it's also expected to signal a rates increase in March.

Today at the press conference following the ECB rates decision all ears will be listening out for bank chief Jean Claude Trichet using the phrase "strong vigilance".

This is because every rate hike since the ECB began raising rates in December 2005 has been preceded by a warning of "vigilance".

Meanwhile the Bank of England is expected to keep interest rates on hold at 5.25% today, but after last month's shock rates hike another is possible today.

www.rte.ie

robd · **Joined:** Nov 9, 2006 **Posts:** 795

Interesting article here

http://www.unison.ie/irish_independent/ ... e_id=15280

and here

http://www.fxcentre.com/news.asp?1643505

Basically ABM Ambro are predicting an ECB of 4.5% this year. This is the highest rate prediction that I've seen by any bank yet. Closer to home Davy's are quoted as saying that the peak of 4% looks shaky. Another mention of the fact that a June rate increase would be signaled at the ECB meeting here in Dublin just before the General Election.

Duplex · **Joined:** Jun 22, 2006 **Posts:** 2917

robd wrote:

Interesting article here

http://www.unison.ie/irish_independent/ ... e_id=15280

and here

http://www.fxcentre.com/news.asp?1643505

Basically ABM Ambro are predicting an ECB of 4.5% this year. This is the highest rate prediction that I've seen by any bank yet. Closer to home Davy's are quoted as saying that the peak of 4% looks shaky. Another mention of the fact that a June rate increase would be signaled at the ECB meeting here in Dublin just before the General Election.

Current rate is 3.5%. 4% looks like an absolute certainty.

Duplex · **Joined:** Jun 22, 2006 **Posts:** 2917

Euro Area money supply growth hits a 17 year high in January putting further pressure on interest rates.

http://www.ft.com/cms/s/8710833a-c652-11db-be1a-000b5df10621.html

The Unwelcome Guest · **Posted:** Thu Mar 08, 2007 1:16 pm

ECB lifts key rate by quarter-point

Thursday, 8 March 2007 13:05

The European Central Bank has raised its main interest rate by a quarter of a percentage point to 3.75% after its meeting in Frankfurt today. The move was widely expected.

The last time ECB interest rates stood at 3.75% was in September 2001. The bank has now raised its key rate seven times since December 2005, each time by a quarter of a percentage point. The last move was on December 7.

Top ECB officials, including president Jean-Claude Trichet, had carefully prepared financial markets for the interest rate move. They have signalled that the bank remains worried about risks from inflation.

AdvertisementBanks and others lenders are now expected to now fully pass on the rate rise to mortgage borrowers. It will add about â‚¬15 to monthly mortgage repayments for every â‚¬100,000 newly borrowed.

Added to the the other six increases announced since December 2005, it means that in just 15 months mortgage borrowing costs will have risen by â‚¬105 a month for every â‚¬100,000 borrowed.

Unfortunately for mortgage holders and house-buyers, economists are expecting that the ECB may have to raise interest rates further in the months ahead.

Halifax has increased its monthly saver account rate by 0.35% to 7.00%, which betters the 0.25% ECB rate increase today.

The bank says it is the best interest rate available in Ireland, and promise it will stay at least 1.5% above the ECB base rate until January next year.

Blindjustice BATONEFFECT · **Posted:** Thu Apr 19, 2007 12:50 pm

Quote:

The European Central Bank has said inflation is still a threat to the euro zone economy, again hinting that it might have to raise interest rates further.

http://www.rte.ie/business/2007/0419/ecb.html

HouseBuyer · **Joined:** Feb 8, 2007 **Posts:** 4736

Blindjustice BATONEFFECT wrote:

Quote:

The European Central Bank has said inflation is still a threat to the euro zone economy, again hinting that it might have to raise interest rates further.

http://www.rte.ie/business/2007/0419/ecb.html

It's worth taking a look at the betting market of betfair.com to gauge the likelyhood of a rise in interest rates.

http://sports.betfair.com/Index.do?mi=2 ... origin=MRL

At the moment, it's not an undistant possibility.

Blindjustice BATONEFFECT · **Posted:** Tue May 08, 2007 5:08 pm

http://www.ecb.int/home/html/index.en.html

Quote:

Webcast of ECB press conference on 10 May 2007
Online and in real time: ECB press conference, from Dublin, Ireland.

At 2.30 p.m. CET the ECB President and Vice-President explain the Governing Council's monetary policy decisions and answer journalists' questions.

yankee · **Posted:** Tue May 15, 2007 9:11 pm

i wonder what are the chances of a .5% increase and if it i happened what kind of a effect would it have in ireland . i think would be the final nail in the coffin for the property bubble as we know it

Green Bear · **Posted:** Tue May 15, 2007 10:52 pm

yankee wrote:

i wonder what are the chances of a .5% increase and if it i happened what kind of a effect would it have in ireland . i think would be the final nail in the coffin for the property bubble as we know it

No fear of that in the foreseeable future, we are getting the boiled frog treatment with regard to interest rates.

Blindjustice BATONEFFECT · **Posted:** Fri May 18, 2007 11:22 am

I would be very interested to see this next graph up to date and then predicted for interest rates of 4.5%

Blindjustice BATONEFFECT · **Posted:** Tue May 29, 2007 9:46 am

http://www.rte.ie/business/2007/0529/ecb.html

Quote:

Rates rises not over yet

conor_mc · **Joined:** Mar 15, 2007 **Posts:** 1829

Axel Weber seems to be one of the most hawkish ECB members, and as the resident German on the council, is probably second only to Mr. Trichet in terms of clout.

http://www.rte.ie/business/2007/0529/ecb.html

It's interesting what he's saying about code-phrases. I mentioned this a month or so ago that I felt that most commentators were coming to rely on the code-phrases rather than looking at the facts available. Economists were revising their peaks upwards by .25% every few months, nearly always 4 months before their old "peak" was due i.e. just after the meeting where Trichet would copperfasten the hike due in the following month. The effect being that there always seemed to be just another couple of hikes before the peak.

A Random Walk · **Joined:** Mar 14, 2007 **Posts:** 2183

Not good news if you want a stop to interest rate rises. A raised inflation forecast would be very bad news indeed.

Quote:

May 30 (Bloomberg) -- European Central Bank council member Nicholas Garganas said the bank will probably raise its inflation forecast next month and is keeping options ``open'' on interest rate increases after June.

``A number of factors are pointing to an inflation rate which is higher than expected so far this year,'' Garganas, who also heads the Greek central bank, said in an interview in Athens yesterday. ``All the options for a further increase in interest rates and the pace and size of further adjustment are open.''

The Frankfurt-based ECB in March forecast inflation to average about 1.8 percent this year, holding below its 2 percent limit for the first time since 1999, before accelerating to around 2 percent in 2008. Some of the assumptions of the forecast for this year now appear to be ``rather optimistic,'' Garganas said.

A Random Walk · **Joined:** Mar 14, 2007 **Posts:** 2183

Up a quarter of a percent as expected.

Any bets on what will be said at the press conference? Will the word "accommodative" be used? It's like central banks for dummies, I'm not surprised they want to dump the use of key words.

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