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Peter Vanden Houte, Chief Economist at ING, suggests that while ECB President Mario Draghi is still putting on a brave face, the minutes of the last meeting of the Governing Council, revealed that some members had their doubts regarding the growth outlook.

Key Quotes

“We believe that the staff projections, now penciling in 1.8% GDP growth in 2019 and 1.7% in 2020 will inevitably be revised downwards at the next forecast round in December.”

“Today’s figures don’t offer many clues for immediate action. We believe that the ECB will proceed with its intention to stop net asset purchases from January onwards. A thorny question that will pop up in the course of next year is whether the ECB will be forced to launch a new TLTRO.”

“In Italy especially, higher funding costs for the banking sector, caused by an increase in the sovereign bond yield, might induce a tightening of credit conditions at a time when the economic recovery is petering out.”