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Eurozone inflation reaches new high
Monday, 30 Jun 2008 05:10
Inflation in the euro area reached four per cent, which increases the chance of the European Central Bank (ECB) raising interest rates this week, the BBC has reported.
The news provider notes the June's annual rate of inflation was ahead of analysts' forecasts of a 3.9 per cent rise.
It suggests that experts believe the central bank will increase interest rates by 0.25 percentage points on Thursday.
This would take the rate to 4.25 per cent.
Gilles Moec, an economist with the Bank of America, tells the new agency: "It is a bit of a shocker. It is clearly going to rattle the ECB further. It certainly plays into the hands of the hawks on the ECB governing council."
In recent weeks, president of the ECB Jean-Claude Trichet suggested that a rate hike could well be imminent as inflation moves away from the central bank's target of two per cent.
He rejected the argument that speculators are responsible for the recent rises in global commodity prices.
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