jeudi 19 mars 2015
Haldane: Drag and drop
Posted on 07:51 by nice news
In March 2009 the Bank of England cut official UK interest rates to 0.5%, their lowest-ever level. Financial markets did not expect this low level of interest rates to
persist, with the first rise expected nine months later in December 2009. Yet six years on, official UK interest rates remain at 0.5%. The first rise in UK interest rates is still expected around a year hence (Chart 1). Like a bad flight, the take-off time for interest rates has been repeatedly put back. That pattern has been mirrored internationally. In March 2009 US policy rates were in a range of 0-0.25%, their lowest-ever level. Markets expected them to rise within a year. In the euro-area, policy rates were also
at all-time lows, but were expected to rise within 18 months or so. Six years on, US policy rates remain between 0-0.25%, while euro-area rates are 150 basis points lower. The first rise in US policy rates is still expected within a year, while the first rise in euro-area rates is now not expected for over four years (Chart 2).
persist, with the first rise expected nine months later in December 2009. Yet six years on, official UK interest rates remain at 0.5%. The first rise in UK interest rates is still expected around a year hence (Chart 1). Like a bad flight, the take-off time for interest rates has been repeatedly put back. That pattern has been mirrored internationally. In March 2009 US policy rates were in a range of 0-0.25%, their lowest-ever level. Markets expected them to rise within a year. In the euro-area, policy rates were also
at all-time lows, but were expected to rise within 18 months or so. Six years on, US policy rates remain between 0-0.25%, while euro-area rates are 150 basis points lower. The first rise in US policy rates is still expected within a year, while the first rise in euro-area rates is now not expected for over four years (Chart 2).
Haldane: Drag and drop
Categories: Haldane: Drag and drop
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