Higher interest rates ‘unlikely’

There is no prospect for higher interest rates in the foreseeable future if the eurozone is entering a period of long-term stagnation, said Ewald Nowotny, ECB governing council member yesterday.

Speaking at a conference in Paris, Mr Nowotny said interest rates at current historic lows “cannot be seen as a long-term equilibrium”.

But he added: “What if we... are approaching a period of long-term stagnation? In this case of course there could not be any idea of having higher interest rates in the foreseeable future.”