The European Central Bank (ECB) is poised to raise interest rates on Thursday, despite mounting evidence that Eurozone growth is faltering. At the conclusion of its 5 June policy meeting, the ECB signaled that it could very well raise Eurozone interest rates, from 4.00% to 4.25%, at its 3 July policy meeting. Specifically, ECB president Jean-Claude Trichet revealed that there were some members of the ECB's governing council who believed at the June meeting that there was a case for raising interest rates immediately. Others believed that interest rates would need to rise, but later, and a third group thought there was no need to raise interest rates. Trichet stated that the ECB is monitoring current events very closely, is in a "state of heightened alert," and could enact a small interest-rate hike next month.
Source: Global Insight Perspectives