The outlook for official interest rates

Market sentiment towards central bank official interest rates has changed quite sharply in the first few weeks of 2023, and there is a definite feeling in the air that the rate of interest rate rises we saw in 2022 will ease, and perhaps that the rises may even soon come to an end. While there are definite reasons for the extreme pessimism of the latter months of 2022 to be lifting, we think it may be premature to declare that central bank tightening has run its course.

Continue reading

The continuing evolution of the ECB

In our article last week we noted that the European Central Bank (ECB) appears to be undergoing a process of transition, and evolving into a rather different organisation from the ECB of 1999, the start of the single currency. We continue this analysis, concluding that having started life as a Bundesbank clone providing very Germanic central banking, the ECB is becoming more truly pan-European, and a central bank for the whole Euro Area.

Continue reading