ECB rate rise ‘would dent consumer spending’

A EUROPEAN Central Bank interest rate increase may “put a lid” on consumer spending in Ireland and Portugal and other peripheral euro area countries, said Carsten Brzeski, an economist at ING Group.

The Frankfurt-based central bank may raise its benchmark rate from a record low of 1% after a meeting on April 7, even as countries from Ireland to Portugal struggle to narrow budget deficits, boost economic growth and restore investor confidence.

“The countries that will suffer the most from the first ECB rate hike are the countries that are still in recession,” Mr Brzeski said.