After policymakers spelt out in July that they were planning to announce more policy stimulus soon, there is sure to be some action when they meet in Frankfurt next Thursday. We think this will include a small reduction in the deposit rate plus strengthened forward guidance. The case for re-launching QE is now weaker than it was in July and the choice of assets is not straightforward, but we suspect that the Bank will agree the details of a new asset purchase programme in October, focused on corporate bonds.
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