In April, the European Central Bank (ECB) raised its rates by 0.25 per cent. Is this move the beginning of a new monetary policy?
Historically, short-term rates move according to long-term trends. In March 2010, the 3-month Euribor, the reference index for the variable rate loans in euros, hit a record low at 0.58 percent. Since, rates are going up again (the index is now at 1.37 percent).
Currently, the European Central Bank is concerned by rising inflation. Its monetary policy has been very loose over the last two years and if commodity prices remain high or rise, it should continue to raise rates.
What could we do if rates continue to go up?Read more