* For full data see
* ECB set to leave rates on hold at 1.0 percent on Dec 3
* ECB rates not seen raising rates until Q4 2010
* ECB seen revising up growth forecasts for 2009, 2010
* Majority see ECB ending full refi allotment by end H1 2010
By Jonathan Cable
LONDON, Nov 25 (Reuters) - The European Central Bank will
not budge on interest rates when it meets next week and it will
be near the end of 2010 before it raises them, despite
brightening their growth outlook, a Reuters poll found.
All 80 economists in a poll before the ECB meets on Dec. 3
said the central bank would leave rates at a record low of 1.0
percent, with only a handful seeing any change before the second
half of next year.
"It is still too early to talk about rate rises," said Colin
Ellis at Daiwa SMBC, who sees rates on hold until at least next
July.
Median forecasts show rates on hold until the final quarter
of 2010 when they will rise to 1.5 percent.
This compares to a poll taken two weeks ago, which saw the
first rise in the third quarter, to 1.25 percent, but still
ending the year at 1.5 percent.
The ECB has been battling to pull the 16-nation bloc out of
a deep recession and figures released earlier this month showed
its loose monetary policy had paid off with a return to growth
in the third quarter of 0.4 percent after five consecutive
quarters of shrinking output.
As part of its campaign the central bank has slashed
interest rates, purchased covered bonds on the open market and
offered unlimited funds for banks for up to a year at a fixed
rock-bottom rate.
But that programme of offering unlimited funds may soon be
coming to an end. A separate poll on Tuesday of euro zone money
market traders found 20 of 24 saying December's 12-month auction
would be the last one-year operation.
"The ECB knows that, having taken such an expansionary
stance, it cannot wait too long to start tightening the reins
again. If it did, it could actually be paving the way for the
next bubble," said Michael Schubert at Commerzbank.
The majority of 51 economists said the central bank would
end its policy of full allotment in its refinancing operations
in the first half of next year as it begins to implement an exit
strategy.
ECB Governing Council Member George Provopoulos said on
Tuesday the central bank would make "final decisions" about
withdrawing the emergency support for the economy when it meets
next week.
PREDICTIONS BRIGHTEN
The European Central Bank is set to update markets on its
predictions for inflation and growth when it meets next week.
The poll found 64 of 65 economists predicting 2010 growth
forecasts would be upgraded, with just one saying they would be
unchanged.
"The ECB in their last forecasts were expecting just 0.2
percent growth (in 2010) and this is a really pessimistic
forecast ... so I think that will be revised up and possibly by
a meaningful amount," said Daniele Antonucci at Morgan Stanley.
Forecasters were a little more divided over the outlook for
inflation, with 27 saying 2010 numbers would be revised up, 3
revised down and 33 saying the would be left unchanged.
A Reuters poll earlier this month predicted the bloc's
economy would grow by 1.1 percent next year, with inflation at
1.2 percent -- well below the central bank's 2.0 percent target
ceiling.
Data released on Monday showed the euro zone's dominant
service sector grew at its fastest pace in two years last month
while figures on Tuesday showed industrial new orders rose
almost twice as much as expected in September.
(Polling by Bangalore Polling Unit; Editing by Andy Bruce)
((jonathan.cable@thomsonreuters.com; +44 20 7542 4688: Reuters
messaging: rm://jonathan.cable.reuters.com@reuters.net))
- 
- 
- 
Welcome,
Guest!
News
