European Central Bank President Christine Lagarde smiles prior to the start of a press conference following a meeting of the governing council of the ECB in Frankfurt am Main, western Germany, on September 9, 2021. – The European Central Bank took a small step towards scaling back pandemic-era stimulus on September 9, 2021, but sought to reassure markets of its ongoing support as the fast-spreading Delta variant clouds the eurozone recovery.
The 1.85-trillion-euro pandemic emergency bond-purchasing programme is the ECB’s main tool to cushion the impact of the coronavirus crisis and is aimed at keeping credit cheap in the 19-nation currency club. “The lady isn’t tapering,” Lagarde told reporters. “We have not discussed what comes next and this is something for which we will prepare in the months to come.”
The PEPP pace over the fourth quarter could now fall back to 60-70 billion euros monthly, according to analysts who had been expecting Thursday’s rhythm adjustment. Eurozone inflation soared to three percent in August to reach a 10-year high, fuelled by one-off effects linked to the pandemic and global shortages of materials like semiconductors, plastics and steel.