Mario Draghi has said the European Central Bank pressed ahead with plans to announce the end of its landmark quantitative easing programme despite signs of a slowdown in growth, as there was “substantial” progress towards policymakers hitting their inflation target.
The bank heralded the end of an era last week when Mr Draghi announced that it would cut the size of its bond purchases under its controversial €2.4tn programme from €30bn a month to €15bn in October, before an anticipated end to the programme in December.
Mr Draghi, the ECB president, said in Sintra on Tuesday it was “undeniable” that “uncertainty surrounding the outlook has increased.” However there was “substantial” evidence to suggest that the “convergence” towards the bank’s projected path for inflation to hit its goal of below but close to 2 per cent had “held firm”.
He said the geopolitical risks from a trade war, higher oil prices, and a greater threat of market turmoil all weighed on the outlook for growth. However, wages across Europe were beginning to pick up at a faster pace, not only in Germany but in France too. A pick-up in wages would boost consumption and lead to higher inflation in the years ahead.