European interest rates face 0.25% hike within six months, warns economist

EUROPEAN interest rates could face a hike of 0.25% within six months, a leading economist warned yesterday.

The same forecast also envisages the euro gaining strongly against the dollar to end the year at $1.32 back where it was at the start of the year.

Ulster Bank warns in its mid market “Outlook” that despite rising oil prices and a slowdown in eurozone growth, the ECB could be forced to raise rates to counter inflation pressures due to the oil surge.