ECB Unlikely to Raise Rates Above 2.50% as Uncertainty Lingers

Dow Jones
07/30

1016 GMT - Despite a positive surprise for economic growth in the second quarter, the European Central Bank is unlikely to consider raising interest rates higher than 2.50%, from 2.25% currently, Alexander Krueger at ABN AMRO says in a note. "The economy is making up for what it lost in the first quarter. At that time, Ireland was holding the economy back; now it is helping to drive economic growth," he says. Given the added strain from the Iran war, 0.4% growth for the quarter is positive. Still, a prolonged Middle East conflict would delay a return to normalcy, the analyst says. The ECB will have to keep a close eye on economic developments as well as inflation, he says.

 

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