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ECB to nudge up growth forecasts but inflation a drag
June 7, 2017 / 1:52 PM / 6 months ago

ECB to nudge up growth forecasts but inflation a drag

FRANKFURT, June 7 (Reuters) - The European Central Bank is likely to nudge up its forecasts for economic growth in the euro zone but trim its estimates for inflation at its meeting on Thursday, sources told Reuters.

This mixed outlook should strengthen the case for keeping the ECB’s aggressive stimulus policy of massive bond purchases and sub-zero rates in place despite growing calls from Germany for a gradual tightening.

The sources said the changes will be small, in some cases as tiny as 10 basis points, reflecting an adjustment rather an overhaul of the March projections.

The ECB is widely expected to keep its policy unchanged on Thursday, including its 2.3 trillion euro bond buying programme and pledge to keep rates low.

But sources told Reuters last week the ECB will acknowledge the improved economic outlook by removing a reference to “downside risks” in its statement.

Policymakers may also discuss closing the door to further rate cuts, although any decision on the matter is far from certain, the sources said. (Reporting By Francesco Canepa Editing by Jeremy Gaunt)

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