ECB unlikely to make any changes to monetary policy stance in September

The European Central Bank Governing Council is unlikely to make any alterations to the monetary policy stance during its meeting next week, noted Nordea Bank in a research report. Even if very low inflation might warrant for additional round of monetary easing, the central bank is expected to remain its waiting mood in the months ahead and announce another easing package in December, added Nordea Bank.

But there is likelihood that the ECB would already modify the criteria that it has set to the asset buying program. It has become quite evident that it cannot complete the current program, without altering the parameters, said Nordea Bank.

The hesitation in executive new policy measures is underpinned by economic development. Even if inflation came in slightly to the negative side in August, both GDP growth and inflation have been widely consistent with the ECB staff June macroeconomic projections.

“Thus, given the fact that inflation is going to accelerate in the coming months due to the base effects, the ECB is likely to buy some time to further analyse developments in e.g. the banking sector before making any further moves”, added Nordea Bank.