The European Central Bank has kept policy unchanged as expected, staying on course to claw back unprecedented stimulus even as the growth outlook continues to darken and political turmoil in Italy looms large over the currency bloc.
Having exhausted much of its firepower with years of support, the ECB reaffirmed that its 2.6 trillion euro ($2.97 trillion) asset purchase scheme will end this year and rates could rise after next summer, sticking to a guidance first unveiled in June and repeated at every meeting since.
“The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019,” the ECB said in a statement.
“The risks surrounding the euro area growth outlook can still be assessed as broadly balanced,” ECB President Mario Draghi said at a news conference. “At the same time, risks related to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent.”
The ECB had debated last month whether to downgrade its risk assessment, suggesting that policymakers are increasingly concerned that the slowdown is not due to one-off factors as previously thought.