Monetary Policy

‘Eurozone deflation fears add to pressure on Draghi’

Published on 4 June 2014 at 11:04

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In the run-up to a much anticipated announcement by the ECB on Thursday 5 June, the Financial Times reports that falling inflation, which dwindled to 0.5 per cent in April, will intensify pressure on ECB President Mario Draghi to adopt a looser monetary policy that could include cutting key interest rates to below zero and other radical measures.

The daily remarks that —

Large-scale asset purchases, known as quantitative easing, are not expected this month. But with the ECB set to exhaust all of its conventional tools to fight deflation, analysts are asking whether Mr Draghi will signal that the central bank is prepared to go further.

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