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ECB expected to signal end to rate hikes
Jean-Claude Trichet always talks tough on inflation, but economists say the European Central Bank president is likely Thursday to signal an end to the rate-hike cycle on growing evidence the pace of price rises has peaked and the euro-zone economy could soon contract amid increasing turmoil related to the debt crisis.
In August, the ECB used inflation rhetoric “which seemed meant to prepare us all for a 25 basis point hike in October,” said Erik F. Nielsen, global chief economist at UniCredit Bank in London. “However, the subsequent intensification of financial tensions and faltering growth momentum call for a significant change in rhetoric at this week’s meeting.”
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