ECB

The UK could fall back into recession at the end of this year, as high oil prices and the impact of the Japan earthquake weigh on global economic growth, said Fidelity's Trevor Greetham.

The European Central Bank is likely to hike interest rates just 25bp to 1.5% by the end of the year, as core inflation remains steady and has barely increased, said Alan Brown at Schroders.

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The Monetary Policy Committee should have started raising the base interest rate last summer to combat inflation and must look to hike rates as soon as possible, said Henderson's Simon Ward.

A record monthly increase in eurozone inflation unexpectedly sent the annual rate to a 29-month high in March, strengthening expectations that the European Central Bank will tighten monetary policy further this year.

ECB RATE HIKE

The Sunday Times recently carried an article about the risk of recession in Spain should the ECB raise rates. According to the quoted economist, a rate rise would be a policy mistake that could push Spain back into recession.

Jean Claude Trichet, the president of the European Central Bank, has defended yesterday's 25 basis point hike in interest rates as good for the eurozone, as EU leaders prepare for talks on the bailout of Portugal.

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