The European Central Bank has revised its growth and inflation forecasts upwards as the euro zone recovery powers ahead – but the region is still set to miss its target for prices this decade.
Speaking after a governing council meeting in Frankfurt on Thursday that kept interest rates at record lows, Mario Draghi hailed the “strong pace of economic expansion and a significant improvement in the growth outlook”.
But despite his upbeat account on growth, the ECB president said muted domestic price pressures had “yet to show convincing signs of a sustained upward trend”, making it important to maintain the bank’s asset purchase programme, which is a divisive issue among the bank’s top officials.
Separately, Bank of England policy-makers left interest rates unchanged on Thursday, moving into a holding pattern after November saw their first hike in a decade.
The UK Monetary Policy Committee reiterated that “further modest increases” in the key rate would probably be needed over the next few years if the economy performed as expected, without providing additional detail on the timing. The rate was held at 0.5 per cent. – Bloomberg/ Copyright The Financial Times Limited 2017
