LONDON, Nov 13 (Reuters) - Long-term interest rates on euro zone debt are bound to rise as the pile of bonds bought by the European Central Bank’s under its stimulus programme ages and its effect on the market wanes, the ECB’s chief economist Peter Praet said on Tuesday.
“At some point, this passive loss of duration will begin to exert increasing upward pressures on the term premia,” Praet told an audience in London.
“Over time, this gradual process will tend to steepen the yield curve, with our forward guidance on policy rates keeping the front end of the curve well-anchored.”
Praet also backed analyst expectations for an ECB rate hike in late 2019 but said the central bank’s policy would remain predictable and only be tightened gradually. (Reporting By Marc Jones; Writing by Francesco Canepa Editing by Balazs Koranyi)