Yon Comical One strikes again: Link
How many times does a guy have to get his predictions wrong before the media stop quoting him? 
It is possible that the ECB could cut interest rates in 2008. I expect them to hold rates for 2007 and early 2008 and perhaps we’ll see a cut in summer 2008 (bail out financil sector, etc begrudgingly). One thing’s for sure in my mind and that is that I can’t see how they could increase interest rates for now. Despite ‘price stability’ being their sole responsibility, I believe they will have to ‘ride with’ current inflation fears.
Someday, Comical is going to be right 
To be honest I can’t see them completely ignoring the current inflation threats.
Comical is ALWAYS right. It is the rest of the world who is wrong.
Things are going to get very interesting next year and I expect some real fireworks.
Germany will try to dig its heels in over inflation which terrifies them. France will lobby very hard for a rate cut to get the Euro down. As the for the other member states, they’ll just have to watch and wait.
We might be stuck at 4% for a while.
Quote
Third-quarter growth picked up in Germany, the biggest euro zone economy, as business investment and consumer spending took over from the traditional export engine.
The economy expanded by 0.7% from the second quarter, when it had grown by 0.3%, the federal statistics office said.
On an annualised basis, economic activity was up by 2.5% when adjusted for calendar effects.
AdvertisementGrowth was underpinned by construction and infrastructure investments and by ‘a moderate increase in household spending,’ historically the German economy’s weakest link.
Trade did not contribute this time to the higher figure ‘owing to a net increase in imports,’ the office said.
The result was widely expected, as is an economic slowdown for the rest of the year and into 2008.
Demand from the US, a key export market, has been hit by problems linked to the sub-prime housing market crisis, while the euro’s rise against the dollar has also begun to weigh on German exports.
High oil prices and tighter credit conditions brought on by the US financial turmoil are limiting economic activity as well. It is expected to slow sharply next year, with the government forecasting growth of 2%, down from 2.4% in 2007.
Some bank analysts have issued 2008 growth estimates of 1.6-1.8%.
Quote
I think they will stay pretty much where they are, with a variance of +/- .25%.
To be honest, in terms of the housing market, it really doesn’t matter too much whether they go up or down by that much. The key in 2008 will be how much banks are willing to expose themselves, and I think we’ll see a massive reduction in mortgage lending.
No bank in their right mind will be lending anything over 5x household income by the end of 2008. What are average wages again - €32k or thereabouts and average household income about €40k?
Dat, my friends, will be dat for the housing market.
Ouch!!!
bloomberg.com/apps/news?pid=20601085&sid=a3mux4M24wKg&refer=europe
Not to mention that unemployment is at a low across the EU,
yet the comical one sees an interest rate reduction on the way!
If it wasn’t for the credit crunch and the euro/dollar exchange rate the ECB would probably be at 4.5% today.
I still think the ECB are more likely to go up than down.
The reckless US monetary policy over the last seven years has proven disastrous for their economy. Hopefully the ECB will not make the same mistake.
With the credit cruch it is effectively at 4.5% isn’t it. In terms of interbank lending etc…
Yet still M3 is in double digits and growing. This suggests that the euribor is still at least 0.5% too low to slow the economy, and once the spreads drop back, we’ll need 3 or 4 ECB increases to get a lid on inflation.