The majority of Europe’s chief central bankers supported the December agreement to extend economic stimulus, an official account from their meeting revealed yesterday.
The account could suggest that there is no imminent end to the asset-purchasing programme, an observer says.
The European Central Bank (ECB) governing council was in “broad agreement” that quantitative easing (QE) should be extended, the minutes showed.
An aim of QE is to boost inflation. Bank chiefs thought the extension was warranted “to preserve the very substantial degree of monetary accommodation necessary to secure a sustained convergence” of Eurozone consumer price inflation. The target rate is just below 2%.
The account of the meeting showed that while the governing council believed that the Eurozone’s recovery was continuing and there was “some visible progress” in inflation, accommodative monetary policy was still seen as important for sustaining progress.
The majority of the council decided to extend the monthly asset scheme by nine months to “December 2017 or beyond, if necessary” but to cut the level of monthly purchases from €80 billion to €60 billion after March 2017.
According to Howard Archer, chief European and UK economist at information provider IHS Markit, it was notable that the ECB’s chief, Mario Draghi, “spent a lot of time in his press conference finding different ways of indicating that the ECB’s move should not be considered as tapering”.
He added that the general tone of the account of the December meeting “maintains our belief there will be no dilution of the ECB’s policy any time soon”.
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