Eurozone interest rates to remain low for a long time

The past number of years have been characterised by a widespread loosening of monetary policy in many countries and a scaling back of rate-hike expectations in economies where policy tightening had been expected to commence. This is now changing.

The era of monetary easing appears to be coming to an end, although interest rates are expected to remain very low in most countries, with the US the only major economy where rates are likely to rise in the next couple of years.

In the UK, the Bank of England is about to conclude its latest round of quantitative easing. Official interest rates, reduced last August, are now likely to stay on hold in the run-up to Brexit in early 2019, given that activity in the UK is holding up much better than expected in the aftermath of the referendum vote last June to leave the EU.