THE MONETARY policies of the European Central Bank (ECB) will be moving in the opposite direction to their US and UK equivalents for several years, according to a senior policymaker.
Benoit Coeure, an economist on the ECB’s executive board, told a French radio station this weekend that the interest rate stances of some of the world’s largest central banks “will diverge” for a period of “several years”.
“We’ll keep rates close to zero for an extremely long period,” Coeure told an interviewer.
While the ECB has just cut its two benchmark interest rates to their lowest levels ever, along with a wider programme designed to stimulate business, the Bank of England and Federal Reserve are likely to soon enter a period of gradual rate hikes.
ECB president Mario Draghi suggested last week that interest rates cannot feasibly be reduced to a lower level.
Currently, many analysts expect interest rate hikes in the US and UK at similar times, around the second quarter of next year.