Kernohan: ECB move too pre-emptive

ECB MOVE TOO PRE-EMPTIVE

Royal London Asset Management's economist Ian Kernohan says an anticipated interest rate rise by the ECB next month should not be viewed as an "on/off switch".

The ECB has signalled an interest rate rise in April, much earlier than we or the market expected, although they have a history of surprising the market, and on a few occasion, they've had to reverse their policy move or signal within a matter if weeks or months. It was the ECB who famously raised interest rates just weeks before the Lehman debacle. We see ECB move as pre-emptive, perhaps too pre-emptive. Although headline inflation is a little above the 2% target, there are few signs of general inflation pressures in the eurozone, indeed some economies have considerable deflationary p...