Bloomberg.com: Europeans' Confidence in Economy Seen Rising to Six-Year High - by John Fraher

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Europeans' Confidence in Economy Seen Rising to Six-Year High - by John Fraher

Nov. 27 (Bloomberg) -- Confidence in the European economy probably rose to the highest in almost six years in November and inflation may have accelerated, strengthening the case for higher interest rates, surveys of economists show. An index of executive and consumer sentiment in the dozen nations sharing the euro may have increased to 110.4 from 110.3 last month, which was the highest since February 2001, according to the median of 24 forecasts in a Bloomberg News survey. The European Commission will release the report Nov. 30.

Economists have revised up their predictions for European Central Bank interest rates on the view the economy of the dozen euro nations will gather momentum next year after a slowdown in the first quarter. Morgan Stanley last week abandoned a forecast for lower borrowing costs in 2007 and now expects the bank to lift its benchmark rate to 4 percent from 3.25 percent.