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Eurozone ‘on hold’ until September
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Monday, January 14, 2008 |
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The European Central Bank (ECB) has left interest rates unchanged at 4%...
High oil prices and an increase in the cost of food have buoyed inflation in the eurozone at a time when economic growth is seen slowing. The ECB has said inflation remains a problem, noting that December's annual rate of 3.1% was above its 2% target.
The ECB's rate-setters are believed to be particularly concerned about spiralling wage demands in countries such as Germany. One analyst predicted that it would be a long wait for a change in eurozone rates.
"After the ECB raised interest rates to a roughly neutral 4.0% in June, the strong euro and the lingering turmoil in money and credit markets will likely keep the central bank on hold until September 2008," said Holger Schmieding at Bank of America
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