Low economic growth but containment of inflation: that is the gist of the report presented to the European Commission by the European Forecasting Network (EFN), a forecasting research group of which (among others) the universities of Cambridge, Halle and the Bocconi in Milan form part. The report relating to the forecasts for 2005 and co-financed by Brussels estimates a rate of economic growth in the EU as a whole of 1.9% (against a growth of 1.8% for the current year), and a lowering of overall inflation to 1.9% (against 2.1% in 2004). Three-quarters of the overall growth will be due to the further expansion of the services sector, but this will be insufficient – according to EFN to reverse the negative trend of employment in almost all EU countries. In spite of the net tendency to increased consumer prices in parity with wages the European Central Bank, the report predicts, is unlikely to increase interest rates on loans, unless there is (as cannot be excluded) a further rise in the price of raw materials, especially petroleum. For further information: http://europa.eu.int/comm/econ/
