Fears ease that ECB will hike rates before 2019

A clarification to comments made by ECB chief Mario Draghi has eased fears that the costs of borrowing for businesses and homeowners would rise before 2019.

The comments by Mr Draghi in a speech earlier this week were interpreted by markets as meaning the ECB could pull back its €60bn-a-month bond-buying support because the eurozone was expanding at a fair clip. That initially sent the euro racing higher against sterling and the dollar.

However, the euro fell back yesterday as vice president Vitor Constancio scrambled to set the record straight, saying the remarks were “totally” in line with existing policy and that the response by investors was hard to understand.