ECB rate hike worry for Ireland

THE spectre of inflation forcing the ECB to raise its historically low interest rate spells bad news for Ireland and the other weaker euro area countries, as they battle with heavy debt repayments.

ECB president Jean-Claude Trichet warned that he would not hesitate to raise interest rates, which have been at 1% for the past 20 months, as inflation rates for December passed the critical 2% mark for the first time in over two years.

He said there was evidence of short-term upward pressure on overall inflation, mainly owing to energy and food prices.