The ECB will leave interest rates at 1.0% at its October policy meeting and is unlikely to signal any significant change in its supportive policy stance for the future. The Bank will probably argue (contrary to our opinion) that its second allotment of 12-month funds will contribute to a pick-up in commercial bank lending. But it should also reiterate that the recovery in the wider economy looks set to be pretty modest. With the risk of deflation lingering, we still see official interest rates on hold for much longer than markets anticipate.
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