ECB gambles on house prices

Policy makers at the European Central Bank (ECB) including president Jean-Claude Trichet and chief economist Otmar Issing are gambling that they will be able to contain surging property prices without derailing consumer spending, which accounts for half of the $9 trillion euro-region economy. "As long as we do not see house prices coming down, those ECB members wanting higher rates will keep pushing for them," says Nicolas Sobczak, senior European economist at Goldman Sachs Group in Paris. "But the consumer is in disarray, so it does not mean they will win." House prices in the 12 nation...