Investment Clock insights

Sluggish eurozone growth could extend QE next year

Ian Kernohan

20 October 2016

There was only a small chance that Mr Draghi would discuss an extension of quantitative easing (QE) today, following the recent reports that European Central Bank (ECB) had begun to consider a taper of the programme.

In the event, he chose not to.  A more appropriate time to do this will be at the next ECB meeting in December, when bank staff have had a chance to revise their economic forecasts. 

Growth in the eurozone remains sluggish but steady, with no sign of any major impact from the Brexit vote.  Very low core inflation and wage growth should most concern policy makers, and are the main reasons we expect a QE extension in March.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.