ECB ready with QE measures to battle deflation

Frankfurt

The stage is set this week for the European Central Bank to unleash its biggest weapon yet in the battle against deflation in the eurozone, analysts said.

Financial markets and ECB watchers are betting that central bank chief Mario Draghi will unveil a programme of sovereign bond purchases known as quantitative easing (QE) at the first policy meeting of this year on Thursday.

With area-wide inflation turning negative in December - consumer prices fell by 0.2 per cent across the single currency region - the alarm…