At Christine Lagarde’s second meeting as ECB President next week, the Governing Council is sure to leave the main policy settings unchanged. The increase in inflation at the end of last year means that there is no urgency to ease policy further, but equally there is no prospect of tightening policy anytime soon. For now, Ms Lagarde should therefore be able to enjoy her honeymoon period without having to worry about immediate policy decisions. However, we still think that there is a greater-than-even chance that the Bank decides to loosen policy further in the second half of the year.
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