ECB to acknowledge risks shifting to the downside

While the ECB will confirm the end of its net asset purchases at its December meeting, it will keep its options open about the future path of policy. The weakness of recent data may well lead it to concede that the risks to growth have shifted to the downside. It will therefore reiterate that interest rates will be on hold “through the summer” and remain non-committal about the likely timing and pace of any policy tightening after that. We still think that interest rates will probably start to rise next September, but only on the assumption that growth picks up in the intervening months.