BoI economist predicts Euro rate rise

The rise of interest rates in a number of countries, including the US, the UK, Australia and New Zealand, and a more hawkish rhetoric of late from the ECB suggest that Euro Area interest rates will rise too, although the precise timing of the first move remains uncertain, according to Dr Dan McLaughlin, group chief economist at Bank of Ireland.

Writing in Bank of Ireland Global Markets Economic Bulletin for September, which was published today, he says that although the market is not pricing in a rise in the repo rate until the first quarter of 2005, the ECB's rhetoric would suggest that monetary policy will be tightened this year.