Two major Irish banks have recently suggested that interest rates in the euro zone could peak before the end of this year at 4.25%. How much credence can be given to this when no one can possibly foretell what will happen to Iraq, German economy, oil prices, US dollar, Russian gas supplies and so on? Furthermore, interest rate trends does not suggest any peaking of euro rates as might be the case for US rates. Do these banks know something the rest of us don't know or do they just have thicker brass necks or bigger crystal balls?
Letter published in the Sunday Business Post on 29th July 2007.
