Inflation is too high for the European Central Bank to consider cutting interest rates yet, its president Jean-Claude Trichet signalled yesterday.

Borrowers are likely to have to wait until the summer, or even autumn, before they see the cost of their mortgages and other debts comes down, economists said. One believes there may be no cuts at all.

Analysts were surprised at the tough tone of Mr Trichet’s comments. The euro hit new record highs against the dollar as it became clear the 1pc gap between interest rates on each side of the Atlantic is likely to widen. The US central bank, the Federal Reserve, has slashed interest rates to 3pc and is expected to cut them to 2.5pc later this month.

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