Business World

Wednesday 23 October 2019

Draghi division: ECB had not agreed to new stimulus plan

European Central Bank President Mario Draghi. Photo: AFP/Getty Images
European Central Bank President Mario Draghi. Photo: AFP/Getty Images

ECB policymakers were divided on Tuesday, with some feeling powerless, after President Mario Draghi hinted at new stimulus measures that had yet to be discussed by the ECB's own Governing Council. Mr Draghi, pictured, told an ECB conference the central bank would ease policy again if inflation fails to accelerate, saying fresh bond purchases, rate cuts or changes to its policy guidance had all been "raised and discussed" at a meeting of the council.

The message depressed the euro and bond yields and angered US President Donald Trump, who accused Draghi of seeking an unfair trade advantage by devaluing the euro. But conversations with six sources at the ECB's annual symposium in Sintra, Portugal, showed ECB rate-setters had not expected such a strong message and there was no consensus on the path ahead.

The sources said the possibility of a rate cut or fresh asset buys had been mentioned only in passing and there had been no substantive discussion.

Reuters

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