FRANKFURT, April 14 (Reuters) – The European Central Bank may present a more precise timetable for the withdrawal of its extraordinary stimulus measures on Thursday, as fears of record inflation outweigh those of a war-related recession.
The ECB has so far shied away from committing to an end date for its stimulus package, fearing that the war in Ukraine and soaring energy prices could suddenly change the outlook.
For now, the bank plans to end bond purchases, commonly referred to as “quantitative easing”, in the third quarter, and raise interest rates “sometime” after that.
Approved last month, this program is already in question, with opposing forces placing the Board of Governors in a dilemma.
On the one hand, inflation is already at a record high of 7.5% and further increases are yet to come. On the other hand, the economy of the European Union is stagnating, and the effects of the war are affecting both households and businesses.
Several conservative politicians, including the central bank governors of Germany, the Netherlands, Austria and Belgium, have argued in favor of higher interest rates, fearing that inflation could last too long. long time.
In addition, long-term inflation forecasts, which are a key indicator of the credibility of the bank’s policy, have decisively exceeded the ECB’s 2% target, even if wages have not yet risen. rise in prices.
So while policy is expected to remain unchanged at Thursday’s meeting, ECB chief Christine Lagarde could come under pressure to signal more forcefully a reduction in support measures in the coming months. (Report Balazs Koranyi and Francesco Canepa; French version Camille Raynaud)