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The Masked Tulip

Trichet Says Interest Rates Will Curb Inflation Risks

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March 26 (Bloomberg) -- European Central Bank President Jean- Claude Trichet said interest rates at a six-year high will help curb inflation in the 15 nations sharing the euro, suggesting he sees no immediate need to cut borrowing costs.

``The current monetary-policy stance will contribute to achieving our price-stability objective,'' Trichet told European lawmakers in Brussels today. ``In the Governing Council's view, the risks to the medium-term outlook for inflation are on the upside.''

The ECB has resisted pressure to follow its counterparts in the U.S. and U.K. and cut rates in response to a global surge in credit costs and slowing growth. Trichet noted that German business confidence unexpectedly rose in March and said inflation, which is running at the fastest pace in 14 years, will stay above the ECB's 2 percent limit for most of this year.

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Part of the problem for Trichet is that some countries in the european union are experiencing huge inflation as everything was extremely cheap for them prior to joining the euro and they are now trying to close the gap. For example if bread cost 10 p in bulgaria and now costs 50 it is still half the price of the uk but has had 500% inflation.

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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