Bank of Ireland economist Dr Dan McLaughlin has changed his forecast for euro zone interest rates. He had expected the European Central Bank to pause after an expected quarter-point rise to 3.5% next week. But the economist now thinks the ECB will raise rates to 3.75% early next year, as bank lending - a concern for the ECB - had not yet slowed.
Earlier, figures showed that growth in the euro zone money supply was steady in October, but was still much higher than the European Central Bank would like.
Annual growth in the M3 measure of money supply stood at 8.5% in October, the same rate of change as in September, the ECB said in a statement.
M3 covers cash, overnight deposits, other short-term deposits, repurchase agreements, shares and units in money market funds and debt securities with a maturity of up to two years. It is the ECB's preferred indicator of medium-term inflationary trends in the euro zone economy.
Because the monthly figures are subject to volatility, the ECB also calculates a three-month moving average for M3 growth, which accelerated to 8.4% in the period from August to October from 8.2% in the period from July to September, the ECB said.
