Friday, March 4, 2011

European Central Bank signals interest rate hike over inflation fears

The European Central Bank is poised to raise interest rates next month as concerns about inflation touch off a new and potentially tricky challenge for policymakers trying to sustain the global recovery: how to temper rising prices without discouraging growth in countries with weaker economies.

The bank, which governs monetary policy for the 17 nations that use the euro, kept rates stable at its Thursday meeting. But in a news conference afterward, ECB President Jean-Claude Trichet gave what analysts called a clear sign that the bank is ready to part ways with the U.S. Federal Reserve and raise interest rates from the historic lows of the recent recession.


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