* ECB to hike rates by 25 bps at April meeting
* Bank seen upping rates 25 bps per quarter this year
* Median 90 percent chance of rate hike by mid-2011
* 32 of 55 say ECB will not widen rate corridor in April
By Jonathan Cable
LONDON, March 30 (Reuters) - The European Central Bank will raise interest rates when it meets next week and is set to follow with a couple more hikes by the end of the year as it focuses on controlling inflation, a Reuters poll found.
The poll of 80 economists, taken this week, found all but four of them expecting the ECB to raise rates by 25 basis points from a record low of 1.0 percent when it meets on April 7.
"Though southern Europe continues to struggle, the (ECB) Governing Council believes that the risk of a wage-inflation spiral developing in northern Europe poses a greater risk to their price stability mandate," said Azad Zangana at Schroders.
Inflation in the 17-country euro zone accelerated to 2.4 percent in February, further above the ECB's target of close to, but below 2 percent, and has now been above target since December.
"Inflation rates ... are now durably above the common definition of price stability in the euro zone," ECB President Jean-Claude Trichet said on Monday.
Trichet shocked markets at the bank's last policy meeting by saying that an April rate rise was possible, putting it in pole position to raise rates before the U.S. Federal Reserve and the Bank of England.
The poll gave a median 90 percent chance of a rate hike by end-June and 97 percent by the end of the year, a massive jump from the respective 25 and 68 percent medians ahead of the March meeting. The euro zone economy grew 0.3 percent in the final three months of 2010 and recent data has suggested that a recovery that was being led by Germany, Europe's biggest economy, has started to filter down to struggling periphery members.
Analysts polled by Reuters two weeks ago predicted first quarter growth of a healthier 0.5 percent for the bloc.
The poll predicted the ECB would raise rates by 25 basis points per quarter through to next March. It would then pause and then add 25 points in the third and fourth quarters of 2012, ending next year at 2.5 percent, in line with an earlier poll.
CORRIDOR WIDENING UNLIKELY
In the final throes of slashing rates at the height of the financial crisis, the ECB narrowed the gaps between its marginal deposit rate and its main rate and between the main rate and an emergency borrowing rate.
Some policymakers had suggested the bank would widen the 'corridor' again when the time came to raise interest rates. ECB board member Jozef Makuch suggested in an interview with Reuters earlier this month, however, that it was not yet on the cards.
"The change in interest rates does not need to be necessarily connected to a change in the interest rate corridor," he said.
Economists in the poll tended to agree with him as 32 of 55 said the bank would not widen the corridor back to 200 basis points if it raises rates next month.
An ECB interest rate hike next month would not carry the normal sting if the bank takes the first opportunity to rewiden its interest rate corridor, although any delay would leave the rest of the job up to the euro zone's banks.
"Eventually the ECB may want to widen the corridor back to 200 basis points, but in terms of policy signalling it may be best to do so under less volatile circumstances," said Elwin de Groot at Rabobank.
"Because the next two rate hikes should be seen as 'warning shots' to prevent second-round effects, a widening of the corridor might blur that message." (Polling by Bangalore Polling Unit) (Editing by Susan Fenton)