Trichet Faces Rate Threat as Crisis Hurts Growth

European Central Bank President Jean-Claude Trichet is facing higher interest rates sooner than he may have planned.

Interbank borrowing costs have been climbing since financial institutions had to pay back a record 442 billion-euro ($557 billion) ECB loan on July 1, threatening to hurt the economy just as investors fret about the health of the banking system and the ongoing sovereign debt crisis. That may force the ECB to consider additional lending measures when policy makers convene in Frankfurt today, economists and analysts said.