Policy to diverge further in 2015

Although the Fed and BoE are likely to start raising rates by the middle of 2015, global monetary conditions should remain very loose next year. The ECB is gearing up to announce a “full-blown” QE programme, perhaps as soon as January, and central banks in Norway, Sweden and Switzerland have either eased already or are preparing to do so. We also think the Bank of Japan is likely to step up the pace of its asset purchases once more next year.