Policymakers to pause in April

After making some fairly big changes in early March, the ECB will probably be happy to leave things as they are at next week’s meeting. President Draghi will have no choice but to give a downbeat assessment of the economic outlook, which will probably set the stage for lower macroeconomic projections in June. And he may also hint that the Bank will offer generous terms on the longer-term loans to banks (TLTROs) which will be offered from September. But we doubt that this will get economic growth back on track, let alone push core inflation back towards the target. So we expect more radical measures, including more QE, further ahead.