The ECB kept their interest rate at 1% today – but there were strong hints of a rise coming soon.
A poll of economists by Reuters resulted in a majority saying that ECB rates would rise in April 2011 . This was after the ECB president said the bank will exercise “strong vigilance” over inflation.
His use of the phrase “strong vigilance” has typically signalled an interest rate hike the following month.
Only last week the vast majority of the same economists had forecast the ECB to wait until the fourth quarter of this year before embarking on an interest rate hike after holding rates at a record low of 1.0 percent for nearly two years.
In the latest survey – with 39 out of 49 analysts expect a rise next month to 1.25 percent.
Forecasts from the remaining minority ranged from May 2011 to the first quarter of next year.