The European Central Bank (ECB) chief economist Philip Lane has signalled that the era of negative interest rates is drawing to a close.
He expects that the current -0.5% interest rate will be gone by September with 0.25% or 25 basis point increases at the July and September meetings of the ECB. Thereafter, he expects rates to fluctuate with the market.
There had been some thinking that the ECB could have taken a more aggressive approach as has been the case in the US following the increase in eurozone inflation.
This has reached 8.1% in the eurozone in May, up from 7.4% in April, with energy price increases of 39.1% in the year to May the main driver.
The ECB signal contrasts with the Federal Reserve in the US, which this week announced a rate increase of 0.5% in an attempt to curb inflation which hit a 40-year high of 8.5%.