ECB seen laying out plans in Q4 to end emergency asset purchases: Reuters poll
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BENGALURU – The European Central Bank is likely to announce long-awaited plans to reduce its pandemic-related asset purchases in the next quarter, according to a Reuters poll of economists, most of whom expected the programme to be wrapped up by the end of March.
With the euro zone economy growing at its fastest pace on record and inflation set to rise further, pressure on the ECB to taper its Pandemic Emergency Purchase Programme (PEPP) is building, as it is on other major central banks. [ECILT/US]
"While the ECB will start discussing phasing out PEPP in September, no decision will be made until December," wrote George Buckley, chief UK and euro area economist at Nomura, in a note to clients.
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"However, we see risks to this view. As COVID-19 cases rise, and uncertainty about the future of the virus in autumn remains, the ECB may want to continue purchases at the current rate until the end of the year, to prevent an unwarranted rise in yields."
While new variants of the coronavirus remain a threat to the world economy, most euro area countries have lowered the public health risks and the likelihood of further lockdowns with successful vaccination drives.