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According to the latest headlines flashing on the wires, via Reuters, citing four sources close to the matter, sluggish growth has not weakened the European Central Bank’s resolve to end a bond-buying scheme later this year but could make it more cautious about signalling interest rate hikes.

Key points:

   “¢   There was unusual unity among ECB rate-setters about ending the bond purchase scheme after a short taper, and that the real debate would be about the future path of interest rates.

   “¢   Recent soft indicators suggest growth is levelling off “” settling into a lower gear but still performing above potential, which will continue to generate inflation.

   “¢   Higher oil prices and a weaker euro are likely to mean an increase in some of the ECB’s headline inflation projections next month.  

   “¢   Core inflation projections will not change significantly when the new estimates are released, however, and some growth forecasts are likely to be cut.

   “¢   Expected timing of the first rate hike, roughly six months after the ECB ends bond buys, could be challenged if the growth environment weakens further.