9 November 2018
Watch as our economists analyse the current state of the economy and markets.
ECB monetary policy
The European Central Bank (ECB) will cease its quantitative easing by the end of 2018, which until now consisted of boosting the amount of money in circulation by buying up (government) bonds. According to the bank's analysis, the policy has been highly effective in putting economic growth and inflation back on the right track. So much so, in fact, that this exceptional measure is no longer necessary.
However, the central bank will continue to purchase bonds on the respective markets in order to compensate for those already in its possession which are approaching maturity. As a result, the monetary policy will continue to place downward pressure on long-term interest rates, thus limiting the potential for any increase. By the same token, short-term interest rates will most likely continue to fluctuate around their current levels over the next 12 months.
Watch the analysis of Peter Vanden Houte, chief economist at ING Belgium