European Central Bank dials back emergency bond purchases, signals no end to stimulus

FRANKFURT. The European Central Bank will dial back its emergency bond purchases a notch over the coming quarter, it said yesterday, taking a token step towards unwinding the emergency aid that propped up the bloc’s economy during the pandemic.

The ECB pulled out all the stops last year as Covid-19 ravaged the economy but with growth and inflation now rebounding, policymakers have been under pressure to formally acknowledge that the worst is over. The move was modest, however, and the ECB gave no signal of its next policy move. “The Governing Council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the Pandemic Emergency Purchase Programme than in the previous two quarters,” the ECB said in a statement.