We have recently published detailed analysis arguing that equilibrium interest rates in advanced economies are now higher than they were before the pandemic, and that they will continue to rise over the rest of this decade. (See here.) The key conclusions for the euro-zone are that we now think that the ECB’s deposit rate will fall to 2.5% by the end of 2025, rather than to 2% as we had previously assumed, and that it will then rise to around 3% by 2030.
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