Interest rates likely to peak at 4.25%

EUROPEAN interest rates are set to hit a six-year high today despite the strong differences emerging over interest rate policy.

It is expected ECB president Jean Claude Trichet will announce a further 0.25% rate rise to 4% with most analysts expecting yet another hike to 4.25% by September.

Some have not ruled out one further hike to 4.5% before the year is over.