ECB warns on eurozone growth and low inflation

03-Sep (FT) — The European Central Bank has warned of a slowing economic recovery in the eurozone and lower-than-expected inflation after the bank voted to keep interest rates on hold at record lows.

During a press conference Mario Draghi, ECB president, cited lower oil prices as one culprit for falling inflation and an economic slowdown in emerging markets was blamed for slower growth in the eurozone.

“The information available indicates a continued though somewhat weaker economic recovery and a slower increase in inflation rates compared with earlier expectations,” he said.

In response, he said the central bank would raise a cap on its €60bn per month asset purchase programme of mostly government bonds, known as ‘quantitative easing’. The bank has now set a purchase limit of 33 per cent of a single country’s debt stock, up from 25 per cent previously.

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