Fixed Income  

Why Europe is on a firmer footing

This article is part of
Investing in Fixed Income - November 2015

“While the Bank of England (BoE) is presumed to be second in line behind the US Federal Reserve in raising interest rates, much of the developed world remains firmly in the accommodative camp. More than half of the world’s economy falls under the auspices of loose or accommodative monetary policies. Similar to the situation in the US, largely absent inflationary pressure in the UK may delay the BoE’s initial hike. Still, sterling should have winds at its back as the timing of the BoE move becomes clearer. Within the eurozone, the Fed’s delay in raising rates was met with comments from the European Central Bank (ECB) that it may extend its quantitative easing programme. Over six months into the ECB’s programme, core inflation has moved off its lows, although headline data remains vulnerable due to weak energy prices.”