This hiking cycle was more gradual when compared to previous hiking cycles, responding to a more uncertain and volatile policy environment which, given the weakening growth outcomes, at times required the MPC to pause and carefully evaluate incoming data to inform future monetary policy moves.
Capacity utilisation is still high, and the global outlook does not call for stepping up investment. On the whole, business sentiment, and thus the propensity to invest, hinge on a more optimistic view of the world economy. Financing conditions, however, are favourable in the euro area. Capital markets rates are about the same level as rates in the US.