"Interest rates reach their peak"

21st September 2007, Comments 0 comments

21 September 2007 , MADRID - Interest rates in the 13-nation euro zone have reached their peak after a cycle of hikes by the European Central Bank, Spanish Prime Minister Jose Luis Rodriguez Zapatero said on Friday.

21 September 2007

MADRID - Interest rates in the 13-nation euro zone have reached their peak after a cycle of hikes by the European Central Bank, Spanish Prime Minister Jose Luis Rodriguez Zapatero said on Friday.

"The increase in interest rates, in my point of view, has reached its peak," he said during an interview with Spanish public radio.

Zapatero, who faces a general election in March 2008, said many Spanish families had felt the effects of the interest rate hikes in their pockets since the majority of their mortgages were set with variable rates.

Earlier this month Spanish Economy Minister Pedro Solbes said he believed the European Central Bank (ECB), which sets monetary policy for a bloc of 300 million people, may even begin lowering rates.

The bank left its main interest rate unchanged at 4.0 percent at its monthly meeting on September 6 amid continuing global credit market volatility.

ECB president Jean-Claude Trichet has said that any change in euro zone interest rates would depend on calm returning to international markets and the development of a firm sense of how much recent turmoil had affected them.

The US Federal Reserve cut its base federal funds rate by half a point to 4.75 percent on Tuesday to give the ailing US economy a shot in the arm.

(Copyright AFP with Expatica)

Subject: Spanish news

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