At a hearing last Wednesday, the President of the European Central Bank Jean-Claude Trichet, has admitted that it is likely to undertake a new, albeit low level, rising interest rates for the month of July. But, leaving aside some of the statements Trichet, was a senior official of the ECB who said he could draw from the increases in interest rates to control inflation figures.
The conclusion is that the ECB would take this step to ensure the anchoring of inflation expectations in the euro area, which will range between 3.2% and 3.6% over this year and between 1.8 % and 3% for 2009.
And is that the ECB is in a state of alert due to the risks of rising inflation, since in this situation could occur which is known as wage-price spiral. They have also realized that there is some slowdown, but it is not too steep, not a collapse.
Announcements like yesterday are a risk for the reaction that can take the banks. If you do not remember the last president of the ECB’s announcement, which produced a call that led to banks raising the interest charged to other banks, creating an inevitable rise in the Euribor, the main indicator mortgage.