European Central Bank Keeps Its Policy Stable


As major economies grapple with higher-than-expected inflation and ongoing supply chain disruptions, European Central Bank He kept his policy stance steady on Thursday. It continued its pandemic-era bond-buying program at a slightly slower pace than earlier this year and kept interest rates steady.

policy makers last month. slowed down the pace of purchase from around 80 billion euros per month in the bank’s pandemic-era bond-buying programme. Bond purchases are one of the bank’s ways to keep interest rates low, and Christine Lagarde, then central bank governor, attributed the change to an improved outlook for the economy and a higher level. inflation expectations.

The annual inflation rate for the euro area rose to 3.4 percent in September, the highest level in 13 years. The economy is recovering from the pandemic, but demand for goods has disrupted supply chains. The central bank predicted export from the eurozone would have been almost 7 percent higher in the first half of the year were it not for these bottlenecks – an impact more severe than the rest of the world, which saw exports increase an additional 2.3 percent. Miss Lagarde said In a talk earlier this month.

The central bank’s 1.85 trillion euro ($2.15 trillion) pandemic bond-buying program is planned It will last until at least March, and investors want to know if it will be extended or whether the central bank’s old bond-buying program will be expanded to help meet the 2 percent inflation target over the medium term. Ms Lagarde said last month that the future of these bond programs would not be discussed until the central bank’s December meeting, when policymakers will receive a new set of forecasts for economic growth and inflation.

The European Central Bank is expected to take a decision. A looser monetary stance with lower interest rates has been in place longer than the policies of the Federal Reserve and the Bank of England, as longer-term inflation forecasts are still below the central bank’s target. Inflation in the UK is expected to rise above 4 percent, well above the Bank of England’s target of around 2 percent. Andrew Bailey, the bank’s manager, said: inflation rate was worrying and authorities needed to prevent high inflation from becoming permanent.



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