June interest rate rise ‘could be the last’

ECB president Jean Claude Trichet is expected to signal a further hike in European lending rates in June when the governing council meets in Dublin on May 10 to consider monetary policy.

If rates go to 4% in June that would represent a doubling of borrowing costs since December 2005 when rates stood at an historic low of 2%.

The June rise could also be the last, said Dr Dan McLaughlin, chief economist at Bank of Ireland Group, even though the markets are still expecting rates to go to 4.25% before the year is out.