— Recent economic data ‘are very positive’
LONDON (MaceNews) – The eurozone recovery has picked up steam in recent months, which could prompt discussions of adjustments to the European Central Bank’s emergency asset purchase programme next week, according to a top rate setter.
“In September, we will have to decide on the volume of purchases for the last quarter of this year,” said ECB Vice President Luis de Guindos in an interview with Spanish online news outlet El Confidencial published on Wednesday. “If Inflation and the economy recover, then there will logically be a gradual normalisation of monetary policy.”
The ECB’s governing council has much to deliberate at its September meeting. Inflation jumped to an annual rate of 3.0% in August, exceeding the Bank’s 2.0% target, while unemployment retreated to 7.6% in July from 7.8% in June, according to data released this week. Gross domestic product expanded by 2.0% in the second quarter, and the eurozone is set to regain pre-pandemic levels “by the end of this year or the beginning of next year,” according to de Guindos.
However, de Guindos acknowledged divisions amongst ECB rate setters. “Different points of view do of course exist; there are 25 of us on the Governing Council,” he said. “Sometimes we take decisions unanimously and other times with a large majority.”
Austrian Central Bank Governor Robert Holzmann has urged the Governing Council to begin debating a reduction in monetary stimulus. Holzmann will vote on policy at next week’s meeting under the body’s rotating system. An announcement will come on Thursday.
But more dovish members can point to a weakening in German and French business sentiment in August, contained in data released earlier this week.
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