ECB interest rate to ‘stay low for decade’, says Merrion Capital economist

A leading economist recommends investors should buy the bond debt of the so-called eurozone peripheral nations, such as Portugal, Spain and Italy, as market participants predict that ECB rates could stay at ultra-low levels for a decade.

Alan McQuaid, chief economist at Merrion Capital, said that “awash with cheap cash” from the ECB, big companies across the eurozone, and including semi-state companies here, “may soon get the same free ride their governments have taken in recent years: Investors paying for the chance to lend to them.”

“The ECB’s plan to buy corporate bonds under its quantitative easing scheme could depress borrowing costs already at record lows and see some companies sell debt at negative yields,” he said.