Inflation fears may force central banks to eye rate increases

05/16/2008 | Bloomberg

The Federal Reserve and Bank of England have both indicated that the recent interest-rate cutting is likely to come to an end as inflation becomes a top priority. Meanwhile, traders expect rate increases and European Central Bank President Jean-Claude Trichet's stance against reducing rates is being vindicated by accelerated growth. "The central banks are taking a pause, but that could turn into a permanent end to rate cuts," said Thomas Mayer of Deutsche Bank AG in London.

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