Last week’s meeting of the ECB Governing Council concluded with the key interest rates unchanged at –0.4% for the deposit rate and 0% for the key refi rate.

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.

There is mounting evidence of a strengthening of the global economy since last autumn.

There is an eerie calm about financial markets at present. Currency and bond markets are quite range bound, while world stock markets hit new record highs in the past week.

The UK economy grew by 0.6% for a third consecutive quarter in the final three months of 2016, continuing its impressive post-Brexit referendum vote performance. 

As widely anticipated, last week’s meeting of the US Federal Reserve saw the central bank increase the target range for the federal funds rate by 25 basis points to between 0.5% and 0.75%.