ECB may raise rates as far as five percent

The European Central Bank still has room to raise interest rates, already at a six-year high, by as much as 1 more percentage point, Harvard University economist Kenneth Rogoff said in an interview published on Saturday. Europe's economy is growing strongly, Rogoff said in an interview in Spanish financial daily Cinco Dias.
"It's very clear the ECB is going to raise rates at least 50 basis points more," said Rogoff, former chief economist at the International Monetary Fund. "In fact, the ECB has room to raise them 75 basis points or a whole percentage point and the central economic scenario would still be very positive." The ECB raised its benchmark rate by a quarter percentage point on June 6 to 4 percent. Reuters latest poll of economists gave an 80 percent chance of ECB rates reaching 4.25 percent by the end of this year and a 40 percent chance they will hit 4.5 percent by then.