Economists: Quarter Point ECB Rate Rise

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ECB President Jean Claude Trichet all but declared plans for another rate rise after the last meeting in August, and 53 economists polled by Dow Jones Newswires were unanimous in their expectation that the bank will follow through with a hike.

All but one of the economists predicted a quarter point increase, to 3.25 percent, and 45 also forecast that the ECB's key refinancing rate will reach 3.5 percent by the end of the year.

Thursday's expected move would be the fifth quarter point rise since last December, when the euro zone's economy started picking up. The recovery has been broadly sustained, with demand for credit still looking strong in the 12 nation zone as the bank's Governing Council prepared to meet.

Nevertheless, inflation appeared to pose less of a threat in September, when euro zone prices were up 1.8 percent over the preceding 12 months, according to EU statistics agency Eurostat below the ECB's 2 percent target rate for the first time since January 2005.

ECB council member Guy Quaden cautioned last month that the bank should not be seen as sticking automatically to a programmed series of rate rises.

"We will evaluate month after month the prospects for activity and inflation. We don't follow a predetermined course of action," Quaden said.

The European Trade Union Confederation on Wednesday urged the ECB to refrain from further rate rises. Otherwise, General Secretary John Monks said, the bank would be in danger of choking off economic growth by hiking rates too rapidly in anticipation of wage increases.

"If the euro area is to experience continued growth, then the recovery needs to become self reliant," Monks said.

"European workers need a raise, and the ECB must realize that reasonable wage increases are part of the solution and not part of the problem."

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