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ECB QE unlikely 'any time soon': Economists

English.news.cn   2014-04-04 07:42:01

LONDON, April 3 (Xinhua) -- European Central Bank President Mario Draghi looks set to consider unconventional measures including more Quantitative Easing (QE) to tackle threats to the eurozone's recovery but not 'any time soon', economists said Thursday.

"One entire paragraph in the ECB's introductory statement was dedicated to stress the ECB's determination to act," said ING Bank eurozone senior economist Carsten Brzeski.

The paragraph committed the ECB to be "resolute in our determination to maintain a high degree of monetary accommodation and to act swiftly if required."

Draghi was quoted as saying he did not exclude further monetary policy easing and that he "firmly" reiterated he expected the key ECB interest rates to remain at present or lower levels for an extended period of time.

"The Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation," Draghi said.

However, Brzeski said he did not predict a bout of QE "any time soon".

Brzeski, in a written analysis, said ECB President Mario Draghi sharpened up the ECB's language to again stress its "determination to act, if needed".

"The ECB's macro-economic assessment was almost a verbatim copy of last month's. Economic activity is bang in line with the ECB's base case scenario. The gradual recovery should continue, although the ECB still sees downside risks to the economic outlook," said Brzeski.

Brzeski said it was "interesting" the exchange rate was still not mentioned as one of these downside risks.

Brzeski said Draghi remarked that he had been surprised by the March drop in headline inflation.

"However, contrary to the inflation data ahead of the November rate cut, the March inflation surprise would not have any significant impact on the ECB's inflation outlook."

Janet Henry, chief European economist with HSBC Global Research said in an analysis, it was yet another month with low inflation and also no ECB action.

She said that she did not expect inflation to pick up in April and so did not expect any policy response next month.

Editor: An
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