Euro zone growth could slow further and uncertainty is on the rise but the blocs expansion remains solid and broad-based, European Central Bank policymakers concluded in April, the minutes of the meeting showed on Thursday. It was widely felt that uncertainty surrounding the outlook had increased and caution was seen as warranted in interpreting recent developments, also because the moderation in growth appeared to be broad-based across countries and sectors, the minutes, which the ECB calls account revealed. A more pronounced weakening of demand, notably related to external factors, could therefore not be ruled out.
In the late April session, the bank left its key interest rates, asset purchases and forward guidance unchanged. The main refi rate is currently at a record low zero percent and the deposit rate at -0.40 percent. With the ECBs 2.55 trillion euros of quantitative easing bond buying set to expire in September, policymakers are debating whether to wind down purchases or keep the stimulus for longer given an unexpected slowdown in growth and rising political risk, particularly in Italy.