ECB Hiking Plans

ECB SOURCES say one more rate hike after Thursday is likely but a
further hike to 3.5% will depend on the economic outlook for 2007
--Some hawks want to move fast to a neutral rate to stem liquidity
growth, but do not have full Council backing
--Nor is there a consensus on where a neutral rate lies
--Staff projections due end-August could show a sharper slowdown in 2007
growth and perhaps inflation above 2% into 2008.