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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/oct/26/brexit-fears-uk-car-industry-european-central-bank-qe-stimulus-draghi-business-live

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Mario Draghi hails eurozone recovery after halving stimulus programme to €30bn per month - business live Mario Draghi hails eurozone recovery after halving stimulus programme to €30bn per month - business live
(35 minutes later)
2.35pm BST
14:35
Q: Last year, when the ECB cut QE from €80bn to €60bn per month, you insisted that you weren’t ‘tapering’ your bond buying programme. So is today’s announcement tapering?
No, Draghi replies. That underlines how the programme is likely to keep running beyond next September (but possibly at a lower rate than €30bn per month).
And that’s the end of the press conference.
2.30pm BST
14:30
Draghi’s insistence that QE is ‘open-ended’ is fuelling speculation that the ECB could keep buying government bonds until 2019.
And that would mean interest rates could remain at their current record lows until 2020!
The chances of #Draghi leaving the #ECB (=> October 2019) without hiking rates once have gone up dramatically today.
#Draghi: QE is not going to stop suddenly =>net asset purchases will go on beyond September 2018 => first rate hike Q2 2019 at the earliest?
2.27pm BST
14:27
Q: If the eurozone recovery turns out to be stronger than you expect, might you reduce the pace of the asset purchase scheme?
This is today’s decision, Draghi shoots back, adding “This is our commitment, we don’t foresee changes now.”
Q: what about if economy becomes more favorable?Draghi: this is today's decision.
2.24pm BST
14:24
Q: The US Federal Reserve raised interest rates 15 months after ending its bond-purchase programme - might the ECB take a similar approach?
We don’t have a fixed timeframe, Draghi replies. Comparisons with other jurisdictions aren’t really appropriate.
2.21pm BST
14:21
Q: What might happen to the ECB’s stimulus programme after September 2018?
Mario Draghi says the programme is “open-ended”, meaning it won’t suddenly stop buying bonds next October.
That will probably reassure the markets, who have developed a taste for very loose monetary policy and don’t want the ECB’s punch bowl to run dry.
Draghi says the magic word: QE is still "open ended." And when and if it ends, "it's not going to stop suddenly"
#Draghi's significant statement: also in September 2018 the program will not end abruptly, so he says the purchases will continue after then
2.18pm BST2.18pm BST
14:1814:18
Draghi: We're watching Catalonia independence very closelyDraghi: We're watching Catalonia independence very closely
Q: Is political uncertainty in Catalonia a risk to financial stability in Spain, and in the euro area at a whole?Q: Is political uncertainty in Catalonia a risk to financial stability in Spain, and in the euro area at a whole?
Mario Draghi says the ECB is following developments with “great attention”, but it is “very difficult to comment on developments that change every day”.Mario Draghi says the ECB is following developments with “great attention”, but it is “very difficult to comment on developments that change every day”.
To conclude now that there will be financial stability risks would be premature. We have to see what will happen....To conclude now that there will be financial stability risks would be premature. We have to see what will happen....
2.15pm BST2.15pm BST
14:1514:15
Q: Why has the ECB decided to keep expanding its asset purchase programme, at a time when the US Federal Reserve is cutting its own QE scheme?Q: Why has the ECB decided to keep expanding its asset purchase programme, at a time when the US Federal Reserve is cutting its own QE scheme?
Draghi doesn’t accept the suggestion that the ECB is wrong to keep buying bonds.Draghi doesn’t accept the suggestion that the ECB is wrong to keep buying bonds.
The US recovery is “way more advanced” than in the eurozone, meaning Europe’s inflation outlook is “way behind”, he says firmly.The US recovery is “way more advanced” than in the eurozone, meaning Europe’s inflation outlook is “way behind”, he says firmly.
2.08pm BST2.08pm BST
14:0814:08
Some reaction to Draghi’s comments:Some reaction to Draghi’s comments:
'communication has been pretty effective' - Draghi pic.twitter.com/4HTgkZ8P6N'communication has been pretty effective' - Draghi pic.twitter.com/4HTgkZ8P6N
#ECB decision not unanimous. Not a surprise. I guess some have issue with length and open-ended. Majority went for open-ended, so not all!!#ECB decision not unanimous. Not a surprise. I guess some have issue with length and open-ended. Majority went for open-ended, so not all!!
2.07pm BST2.07pm BST
14:0714:07
QE decision was not unanimousQE decision was not unanimous
Q: Was today’s decision unanimous?Q: Was today’s decision unanimous?
No, there were different viewpoints, Draghi replies.No, there were different viewpoints, Draghi replies.
He says there was a “broad consensus on several issues, and a large majority on other issues.”He says there was a “broad consensus on several issues, and a large majority on other issues.”
2.05pm BST2.05pm BST
14:0514:05
Q: How did the ECB go about preparing the public for today’s changes?Q: How did the ECB go about preparing the public for today’s changes?
My understanding is that the market reaction was pretty muted, Draghi replies, even though the policy announcement was fairly important.My understanding is that the market reaction was pretty muted, Draghi replies, even though the policy announcement was fairly important.
That shows that our communication was pretty effective.That shows that our communication was pretty effective.
2.03pm BST2.03pm BST
14:0314:03
Draghi says there are global factors influencing inflation...but the ECB is focused on the factors closer to home, which it can influence.Draghi says there are global factors influencing inflation...but the ECB is focused on the factors closer to home, which it can influence.
He points out that the eurozone has created more than seven million jobs in the last four years - a sign that his policies are bearing fruit.He points out that the eurozone has created more than seven million jobs in the last four years - a sign that his policies are bearing fruit.
2.00pm BST2.00pm BST
14:0014:00
Draghi is hammering home that the ECB will continue to reinvest the stock of existing assets bought under QE since 2015.Draghi is hammering home that the ECB will continue to reinvest the stock of existing assets bought under QE since 2015.
This has become “more and more important” as we’ve bought “a lot of bonds” smiles Draghi:This has become “more and more important” as we’ve bought “a lot of bonds” smiles Draghi:
Draghi: The stock of purchased assets has become more and more importantDraghi: The stock of purchased assets has become more and more important
When I announced the reinvestment policy in December 2015 "there was no reaction", says #Draghi with a very telling smile.When I announced the reinvestment policy in December 2015 "there was no reaction", says #Draghi with a very telling smile.
The ECB has bought something like two trillion euros of bonds since it plunged into QE in 2015. Draghi’s point is that the programme will still have a major impact on the economy, as the ECB plans to buy new bonds when its existing holdings mature.The ECB has bought something like two trillion euros of bonds since it plunged into QE in 2015. Draghi’s point is that the programme will still have a major impact on the economy, as the ECB plans to buy new bonds when its existing holdings mature.
So there are no plans to start cutting the size of the programme - something the US Federal Reserve is just starting to do.So there are no plans to start cutting the size of the programme - something the US Federal Reserve is just starting to do.
1.52pm BST1.52pm BST
13:5213:52
#Draghi: "atmosphere was positive in governing council" (growth side) "different on inflation" (energy prices) #ECB pic.twitter.com/cnaysxRdU6#Draghi: "atmosphere was positive in governing council" (growth side) "different on inflation" (energy prices) #ECB pic.twitter.com/cnaysxRdU6
1.52pm BST1.52pm BST
13:5213:52
Q: Did you discuss alternative courses of action, before deciding to cut the pace of the APP to €30bn per month?Q: Did you discuss alternative courses of action, before deciding to cut the pace of the APP to €30bn per month?
No, says Draghi. The “atmosphere was pretty positive” at today’s meeting, thanks to the increase in employment across the eurozone and rising wages.No, says Draghi. The “atmosphere was pretty positive” at today’s meeting, thanks to the increase in employment across the eurozone and rising wages.
The discussion thus ‘converged’ on the idea of halving the pace of the QE programme, and running for at least another nine months, although there were “some differences” about the details.The discussion thus ‘converged’ on the idea of halving the pace of the QE programme, and running for at least another nine months, although there were “some differences” about the details.
1.49pm BST
13:49
Draghi's Q&A begins
Onto questions.
Q: Did the ECB discuss changing the composition of the assets bought under your stimulus programme?
No, Draghi replies. But the press get more details later today on how the asset purchase programme will evolve, and re-invest its assets (as bonds mature)
1.47pm BST
13:47
Mario Draghi then issues his tradition call on eurozone politicians to do better.
In order to reap the full benefits from our monetary policy, other parties must also act, he says.
That includes “substantially” speeding up the implementation of structural reforms in “all eurozone countries”.
Draghi also calls for “more growth-friendly” fiscal politics across the eurozone.
1.43pm BST
13:43
Economic growth in the eurozone continued “unabated”, declares Draghi proudly.
He says there has been an upswing in business investment. Construction investment has also improved, and eurozone exports are benefitting from the improved picture in the global economy.
Draghi says eurozone growth has continued "unabated." New word in his vocabulary.
Draghi talking about the eurozone economic recovery like a proud dad
But.... there are also downside risks, Draghi continues, including ‘global factors’ and ‘foreign exchange’ effects (ie, the recent strengthening of the euro).
1.39pm BST
13:39
Draghi is talking about how the ECB has ‘recalibrated’ its bond-purchase programme.
It's recalibration and not tapering! #ECB #Draghi #QE #EUR
1.38pm BST
13:38
Turning to the economic picture, Draghi says that domestic prices pressures are still muted.
Thus, “continued monetary policy support” is needed to underpin the economic outlook and keep inflation on track.
1.37pm BST
13:37
Draghi's press conference begins
Mario Draghi begins by telling reporters that his governing council conducted a “thorough” analysis of the outlook for inflation in the eurozone today.
Draghi confirms that the ECB decided to leave interest rates at their current record low, and expects to leave borrowing costs at these levels for an extended period.
He also confirms that the ECB will maintain its QE programme for another nine months, at a pace of €30bn per month, “or beyond if necessary”.
The ECB stands ready to increase the asset purchase programme in terms of size and or duration if needed, he adds.
Speaking particularly crisply, Draghi concludes:
Today’s monetary policy decisions were taken to preserve the very favourable financing conditions that are still needed for a sustained return of inflation to levels that are close to, but below 2%.
Updated
at 1.44pm BST
1.33pm BST
13:33
1.30pm BST
13:30
Mario Draghi's press conference - live feed
Over in Frankfurt, ECB president Mario Draghi is explaining today’s decisions to the press pack.
You can watch it live here:
1.18pm BST
13:18
Anna Stupnytska, global economist at Fidelity International, reckons the ECB was right to maintain its QE programme for another nine months.
She writes:
“The Euro area recovery is certainly becoming more entrenched, with broad-based growth across countries and sectors of the economy. The euro strength seen so far is unlikely to derail the growth story or pave way for a return of deflationary worries.
At the same time, however, given the remaining slack in the labour market, inflation is far below the target and is likely to rise only at a very sluggish pace.
Stupnytska adds that the ECB will be concerned that the Catalan independence crissi could have a “non-negligible” impact on growth.
Updated
at 1.19pm BST
1.09pm BST
13:09
German conservative MEP Markus Ferber has heavily criticised the ECB’s decision to extend its stimulus programme.
Ferber argues that there’s no justification for buying tens of billions of government and corporate bonds each month, with newly created money.
Ferber says:
“The Eurozone is growing strongly, inflation is picking up, and downside risks are minimal. It seems like the textbook case for the right time to phase out quantitative easing and start a normalisation of monetary policy.
Instead the ECB locks in their flawed monetary policy approach for the months to come and defers normalisation indefinitely. I am disappointed that the ECB missed yet another chance to initialise a normalisation of monetary policy. The asset purchasing program will keep distorting the market and lays the foundations for the next crisis.”