Gathering pace Draghi: Eurozone recovery

European Central Bank (ECB) head Mario Draghi has said the eurozone’s economic recovery is ‘increasingly solid’ and faces fewer risks. But he added that inàation in the 19-nation bloc was still not high enough to raise interest rates, BBC wrote.

The ECB has kept its main interest rate on hold at zero for another month.

It also decided not to change the ECB’S bond-buying stimulus scheme, which is already being trimmed to Є60 billion (£51billion) a month from Є80 billion.

Economic con¿dence is at its highest since the eurozone debt crisis, but inàation continues to miss the ECB’S target for a ¿fth straight year.

‘Subdued’

Draghi said the recovery was helped by higher consumer spending, wage growth and a global economic rebound.

But inàationary pressures also ‘remain subdued’, with prices largely only going up earlier this year because of higher energy costs, he said.

He also sounded a note of caution about growth. “The risks surrounding the euro area growth outlook, while moving toward a more balanced con¿guration, are still tilted to the downside,” he said.

The ECB cut its main interest rate to zero last year to try to stimulate economic growth and avoid deàation or falling prices.

As well as the rates decision, the bank said it would continue buying Є60 billion of bonds a month “until the end of December 2017, or beyond, if necessary”.

Analysts were watching for any hints that the bond-buying program, known as quantitative easing (QE), would be reduced.

Paul Sirani, an analyst at Xtrade, said: “Put simply, it seems that Draghi is reluctant to reveal his hand amidst unsatisfactory, yet improving, economic and political conditions.”

Ranko Berich, of Monex Europe, said: “Barring a wholesale change in opinion among the governing council against Draghi’s position, ECB QE is here to stay for now.”

The euro fell about 0.5 percent against the dollar to below $1.09, having brieày swung higher on Draghi’s comments about a ¿rming recovery.

Economic growth has picked up in recent months, with employment rising and economic sentiment hitting a 10-year high this month.

Inàation, though, slipped back to 1.5 percent in March after brieày going above the ECB’S target in February for the ¿rst time in four years.