ECB left with no choice but to boost stimulus: economists
Frankfurt
MARIO Draghi has no room to back down. Economists surveyed by Bloomberg unanimously predict the European Central Bank (ECB) will boost stimulus again this week, less than halfway through a 1.1 trillion-euro (S$1.6 trillion) bond-buying programme, and most foresee multiple measures. The institution's president must now find a way to meet expectations or risk an investor backlash that could stymie the euro-area recovery.
Mr Draghi has been priming markets for action since October, saying the ECB will do what it must to raise inflation as quickly as possible, and investors are now betting that the probability of a deposit-rate cut is 100 per cent. Now, even with some officials voicing misgivings, his Governing Council may find that only a rate reduction combined with increased bond purchases and possibly as-yet unannounced tools will prove convincing enough.
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