Despite continuing global financial market nervousness, the European Central Bank on Wednesday waved off calls for it to abandon its planned September rate hike, according to DPA. The Frankfurt-based bank reaffirmed remarks made ECB chief Jean-Claude Trichet last month signalling its plans to raise the cost of money at its meeting set down for next month. The forecast 25-basis points increase would represent the bank's ninth increase in borrowing costs since launching its current rate-hiking cycle cycle in December 2005. A September increase would bring interest rates in the 13-member eurozone to 4.25 per cent. At a special press briefing, Trichet said that the bank's governing council's concerns about renewed inflationary pressures meant that it was exercising strong vigilance, which is ECB code indicating that a rate increase is in the pipeline. However, since then the crisis in the US housing industry has sent financial markets tumbling around the world as fears have grown about the impact of the subprime mortgage market woes on the global economy.
