Bank of Ireland economist Dr Dan McLaughlin has changed his forecast for euro zone interest rates because of strong economic growth figures from a number of countries.
The economist had previously thought that the European Central Bank would raise rates only once more - to 3.75% in March. But he now believes rates will go up to 4%, most likely in June.
Dr McLaughlin said better than expected growth in Germany, Italy and France in the final three months of 2006 had led to a 'growth surge' in the euro zone. He said forecasters were now 'scrambling' to revise up their 2007 projections.
Last week Dutch bank ABN Amro predicted that the ECB would bring rates up to 4.5% by the end of this year.
