According to a survey by Deutsche Bank, a considerable number of investors expect the Federal Reserve and the European Central Bank to maintain a slightly loose monetary policy over the long term.
Deutsche Bank conducted a market sentiment survey of more than 600 investment professionals around the world from October 6 to 8. For the Fed, 42 per cent expected the Fed to remain slightly dovish, 24 per cent expected the policy to be "roughly right" and 33 per cent expected the Fed to be more hawkish.
For the ECB, respondents believe that the ECB is more likely to make dovish policy mistakes. Forty-six per cent expected ECB policy to remain loose, 26 per cent thought it would be "roughly right" and 21 per cent thought the ECB would tighten too early or too much.
For the Bank of England, 45 per cent thought it was at greater risk of hawkish policy mistakes, 20 per cent thought the policy would be "roughly right" and 20 per cent would remain dovish.
It is understood that in recent weeks, central bank policy makers have been cautious and seem to take a "wait-and-see" attitude towards the prospect of inflation and interest rate hikes.
However, Andrew Bailey, governor of the Bank of England, on Sunday gave the clearest hint yet that the UK might raise interest rates and said the Bank of England would "have to take action" to curb inflation.