020 7898 0500Somewhat remarkably, the last time the European Central Bank increased interest rates was in 2011, when Jean-Claude Trichet was president. Under Mario Draghi’s tenure, rates have been kept on hold at 0% and there has been speculation that there might not be an increase during his presidency (which is set to end on 31 October 2019).
However, on Monday, Draghi suggested there would be a ‘relatively vigorous’ pickup in underlying inflation. This has been interpreted by some that rates could rise faster than previously thought and there could well be a hike as early as September 2019. Obviously we will know more nearer the time, but Draghi’s comments certainly marked a notable shift in his rhetoric.
The euro made some gains against the dollar as the markets are fairly bearish about the greenback at present, while moves were very limited against the pound. It’s a fairly quiet day for the eurozone, although the European Central Bank will be holding a non-monetary policy meeting. It is unlikely that there will be any fireworks from the meeting, but you never can tell.
