Enter multiple symbols separated by commas

ECB Still on Track to Raise Rates in September: Analyst

The European Central Bank is still likely to raise the interest rate in September, as it had previously signalled, despite the turmoil in financial markets, Trevor Williams, Chief Economist at Lloyds TSB Corporate Markets, told "Worldwide Exchange."

The U.S. Federal Reserve on Friday cut the discount rate at which it lends directly to commercial banks to quell the liquidity squeeze in the credit markets, a move seen by some market players as a last step before lowering its benchmark federal funds rate.

Williams said the ECB was unlikely to follow suit. "The ECB has been pumping a lot of liquidity into the European money markets and I suspect part of the reason is that they do still want to go with the move in September that they had already signalled," Williams said.

He said growth in the eurozone was still strong while unemployment was still falling, so the ECB would be keen to go ahead with the decision they had planned.

"They may delay the rate rise but they may not want to," Williams said. "It depends on how the market performs, but I suspect for the moment they are still on track to raise rates."

The euro was up against the dollar and against the yen in morning European trade.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • CNBC's Phil Han reports on the two candidate cities vying for the 2022 winter Olympics and who might have the lead.

  • Piper Hoppe, 10, from Minnetonka, Minnesota, holds a sign at the doorway of River Bluff Dental in Bloomington, Minnesota, on July 29, 2015, during a protest against Cecil's killing.

    The U.S. Fish and Wildlife Service has been trying to find the man who shot a lion in Zimbabwe, but he is not responding.

  • Donald Trump

    From one real estate mogul about another: Don't underestimate Republican presidential candidate Donald Trump.

U.S. Video