Investment Clock insights

Time has come for ECB to roll back pace of asset purchases

Ian Kernohan

7 September 2017

It is now less than four months until the current phase of the European Central Bank (ECB) asset purchase programme ends. The ECB was not expected to signal a reduction in quantitative easing at this meeting, but to leave the door open for an October announcement.  
Inflation is low and the euro has strengthened, however for the first time in many years, economic growth has surprised to the upside this year. The time has come to roll back further on the pace of monetary easing, and I would expect a decision at the next ECB meeting to reduce the pace of bond purchases in January.  
We are still a long way from a hike in key interest rates however, and the ECB expect these to remain at their present levels well past the current horizon for quantitative easing.

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.