Eurozone rates set to rise

Eurozone interest rates are set to rise for the first time in five years despite a dip in inflation.

The European Central Bank is set to raise the rate an expected quarter of a percentage point amid long-term fears over price stability and the impact of high oil prices.

Inflationary pressure has been less than predicted but inflation has remained above the ECB’s price stability target of “below but close” of two per cent for ten months.

October figures showed a slight dip in inflation with a drop from 2.5 per cent to 2.4 per cent.

The move has already annoyed eurozone politicians more politically concerned over Europe’s sluggish growth rates.

EuroCommerce has warned of the potential impact of an interest rate increase on consumer purchasing power.

“For the commerce sector, which represents a large part of the European economy and is one of the few still creating employment, any interest rate increase should be assessed against its consequences on purchasing power, household consumption, competitiveness and on employment.”

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