ECB council agreed in June on need to be ready for more stimulus

European Central Bank policymakers gathering last month agreed on the need to be ready to provide more stimulus to the euro zone economy in an environment of “heightened uncertainty”, an ECB account of the meeting showed on Thursday.

With a trade war between the United States and China hurting euro zone exporters and the Federal Reserve widely expected to cut its interest rate, the ECB is coming under pressure to ease its own policy again.

The bank’s Governing Council put off any rate hike for at least a year at its June 5-6 meeting and President Mario Draghi emphatically opened the door to more stimulus in the following weeks.

“There was broad agreement that, in light of the heightened uncertainty, which was likely to extend further into the future, the Governing Council needed to be ready and prepared to ease the monetary policy stance further,” the ECB said in its account of the meeting.

It added potential measures included new changes on the ECB’s guidance on rates, new asset purchases and rate cuts.

The account also showed that the ECB was considering “more strategic” moves if inflation remained low and that it planned to emphasise that an overshoot as well as an undershoot of inflation would be tolerated.

Reuters

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