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03 December 2007

EZA 822 Report: ECB Observer




ECB 6 December Council Preview


NO RATE MOVE EXPECTED 6 DECEMBER: ECB's WAIT-AND-SEE STANCE, WITH TIGHTENING BIAS, SET TO CONTINUE THROUGH TO SUMMER 2008.

· Recent economic and monetary developments and continuing financial market tensions point to ECB maintaining wait-and-see stance with tightening bias again this month.

· With heightened risks of inflation and of economic downturn, and little sign of markets calming soon, next 'refi' rate rise (to 4 1/4%) likely to be postponed until summer of 2008.

· If financial turbulence worsens, ECB could be forced to cut rates, despite inflation fears, but with a view to raising them later once the financial situation returns to normal.



© EZA

Documents associated with this article

EZA822.pdf


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