Very low euro interest rates here to stay

The outcome of last Thursday’s meeting of the European Central Bank (ECB) Governing Council was in line with market expectations, with no changes to monetary policy. Thus, purchases of securities under its quantitive easing (QE) programme will continue to run at a rate of €60bn per month until at least September 2016, with interest rates staying at virtually zero.

However, the ECB emphasised its willingness to loosen even further if warranted, by using all the instruments available within its mandate, in particular by adjusting the size and duration of its QE programme.

Thus it is clear that the ECB has a bias towards further easing and is prepared to take additional action, if required, to meet its inflation objective.