ECB watchers bet on bondbuying exit hint

RIGA: Many observers expect the European Central Bank to announce, or at least hint strongly, that the end is nigh for its massive support for the eurozone economy, although looming threats to the bloc wi l l weigh on governors’ minds.

Central bankers’ monthly bond purchases of 30 billion euros ( US$ 35 billion) and ultra-low interest rates are designed to stoke growth in the 19- nation single currency area and power inf lation to their target of just below 2.0 per cent.

Growth has picked up across the bloc, although at a slower pace in early 2018 than last year – 0.4 per cent between January and March compared with 0.7 per cent i n the previous three months.

Meanwhile, eurozone price growth surged to 1.9 per cent in May, in line with the ECB’s target.

“Core” inflation discounting the most volatile elements remains weak, but the data suggest that over 2.4 trillion euros of ‘ quantitative easing’ ( QE) or mass bond- buying since 2015 has dispelled the risk of def lation, or a downward spiral of prices braking economic activity.