European Central Bank has one item left in its toolkit: dual rates

A version of this article originally appeared in the Financial Times last week.

There is a widespread assumption that the European Central Bank — like other major central banks — has reached the limits of monetary policy, and that the best we can hope for with Christine Lagarde’s reign is political astuteness in cajoling reluctant politicians to embrace a fiscal stimulus.

This is n…

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BVTV: Recession or growth ahead?

Sovereign bond markets sold off last week, following strong US data. However, Friday’s US jobs report showed that hiring cooled down in September more than expected – a point that markets seemed to ignore as Treasuries continued to sell off. Is it a growing US economy that we have ahead? Or should we expect growth to be challenged by higher rates and rising oil prices? Watch M&G’s portfolio man…

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We are nowhere near the zero bound

Guest contributor – Eric Lonergan (Fund manager on M&G’s macro hedge-funds and multi-asset team, and author of “Money”)

We need more cash, not less.

Many economists just assume that central banks have hit “the zero bound” on interest rates and that conventional policy is thereby exhausted. Take Ken Rogoff’s bizarre proposal as an example:

Let’s forget about the idea of phasing out paper curren…

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