The European Central Bank will keep buying bonds and maintain its deeply negative interest rates in an attempt to shift the eurozone economy out of its persistent pattern of sluggish inflation, its policymakers decided on Thursday.
The ECB also said it was prepared to tolerate a moderate and transitory overshoot of its inflation target as it believes that a “persistent” policy is necessary when rates are close to the lowest point at which cuts are effective — as they are now.
The guidance came two weeks after the ECB agreed a new strategy that lifted its inflation target to 2 per cent, dropped a promise to keep price rises below that level and accepted that they can even exceed it temporarily. It was the first change in strategy for almost two decades.