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ECB expected to hike interest rate this week
Date 04/04/2011 14:56  Author webmaster  Hits 1151  Language Global
04 APR 2011

By Leigh Phillips | EUobserver

The European Central Bank is on Thursday (7 April) likely to increase its interest rate for the first time since mid-2008, aiming to keep a lid on rising inflation in the eurozone.

Analysts expect a moderate hike from the current 1.0 percent to 1.25 percent after inflation jumped to 2.6 percent in March in the countries that employ the single currency, up from 2.4 percent the previous month.

The increase in price pressure was higher than expected, markedly higher than the central bank's target of under 2.0 percent and came as Germany, the EU's economic powerhouse, saw a drop in unemployment.

Hikes in oil, food and other commodity prices lie behind the rise in inflation a phenomenon that does not appear to be turning around any time soon as political uncertainly in oil-producing countries remains.

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