Trichet sticks to line on higher interest rates

European Central Bank President Jean-Claude Trichet today reemphasised the case for higher interest rates in the Eurozone.

Mr Trichet was addressing the European Parliament’s economic and monetary affairs committee.

Following commentary from ECB Executive Board member Jurgen Stark earlier this week, Trichet’s comments have prompted the market to factor in the risk of rate hikes over the coming months.

In spite of Mr Trichet's hawkish comments, Ulster Bank's corporate markets strategist Niall Dunne has said: "We see little in his commentary which leads us to believe that Eurozone interest rates will rise again when the central bank’s governing council next meets on July 6.

"Trichet’s comments earlier today reiterated and reinforced previously stated opinions, but fell short of giving the market fresh guidance on the timing of upcoming hikes."