Lat week we had some panic headlines in Ireland because one Ulster Bank economist – Simon Barry – said that he expected six consecutive quarterly interest rate increases from the ECB. This would mean the ECB rate rising from 1pc to 2.5pc by the end of 2012.
Bur – what do other forecasters and analysts expect to happen to ECB rates?
A recent survey – the “ECB Survey of Professional Forecasters” was conducted between 14 and 18 January 2011. There were 56 forecasters who gave their opinion
They forecast the the ECB’s policy rate to remain stable at around 1.0% until the second quarter of 2011 and then to increase to 1.7% on average in 2012.
Another poll of economists reported by Reuters showed that a majority (Forty-two out of 78 ) expect a rate hike from the European Central bank before the end of 2011. Median figures in the poll showed ECB interest rates rising to 1.25 percent in the fourth quarter of 2011 and then rising by 25 basis points per quarter until the end of September 2012, ending next year at 2.0 percent.
Chief Economist at the Economist Intelligence Unit, Robin Bew – said in January ”
“When you look to Europe though, Continental Europe, although Germany is very strong, the rest of Europe still has quite a lot of problems and of course, across Europe in general, there is quite a bit of fiscal austerity in place, that’s going to hold growth back to some extent. “So we don’t think they’re going to raise interest rates until the first half of next year – 2012”