Have euro interest rates hit rock bottom? According to Ulster Bank's treasury economist, Mr Aziz McMahon, rates are more likely to rise than fall going forward and the first half of 1999 may come to be remembered as a nirvana for borrowers.

"The tide has been turning in Europe and the European Central Bank has noted that `the downside risks to growth and prices which prevailed in the spring have now receded'," he says.

However, Mr McMahon believes interest rates will remain low by historical standards since deregulation and tougher competition in product and labour markets, as well as a stronger euro in 1999 should dampen price pressures.

The Ulster Bank economist also suggests that Britain is an attractive location for investment. He believes that because inflation is likely to remain subdued for the foreseeable future, the Bank of England will leave interest rates unchanged until the second half of 2000 at the earliest.

"Hence, the prospect of stronger growth with steady interest rates makes the UK a particularly attractive location for investment," he says.