Inflation return tipped for Q3.

(From The Standard)

Byline: Vanson Soo

Hong Kong will probably return to inflation as soon as the third quarter while interest rates will rise in 2005 after the United States raises its rates at the end of this year, according to HSBC Holdings.

The bank's chief economist for Greater China, George Leung, said that although mild inflation was likely in the third quarter, overall inflation will be around zero for 2004 as a whole. ``We are still in deflation now but the downward trend has already ended,'' Leung said yesterday. Hong Kong is gradually pulling out of a 65-month-long deflationary trend and will still be in low inflation next year, which …