Is the ECB ready to pull the trigger on more stimulus?
Duncan Richardson, News Editor
23 Oct 2015, 4:10 p.m.
The European Central Bank is ready to step up its monthly quantitative easing as soon as December. The euro fell immediately against the dollar on news the ECB may crank up the printing press in attempt to stop deflation taking hold across the 27 member states.
Recent inflation data suggests inflation in the Eurozone has turned negative in September. It was the threat of inflation which promoted the ECB to start its £44 billion a month quantitative easing program at the start of 2015. Quantitative easing is a process whereby central banks buy government debt, with money it has printed or created electronically. With interest rates close to zero the ECB has few options left.
The recent slowdown in China and the prospect of the U.S. lowering interest rates has increased deflationary concerns in the Eurozone.