With the euro-zone recession still gathering pace, we see the ECB cutting interest rates by another 50 basis points to 1.0% this month. Indeed, it should not be long before rates reach 0.5%. But the key issue is what indications the Bank will give that it is prepared to follow the Federal Reserve and the Bank of England into bolder unconventional policies such as asset purchases to support the euro-zone economy. While the ECB looks set to extend the maturity of some of its bank lending this month, we doubt that it is quite ready yet to buy assets outright.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services