Summary:
- ECB meets in the backdrop of the French elections
- No changes to monetary policy are expected at this week’s meeting
- ECB officials maintain that current policy is appropriate
- Only concrete signs of an increase in inflation will see an appropriate policy response from ECB officials
The European Central Bank will be meeting this week on April 27. No changes to monetary policy are expected at this week’s meeting as the central bank meets amid a high level of uncertainty on the back of the French elections where the focus turns to the second round due in May.
Tame inflation expected to keep officials muted
The central bank is likely to maintain its forward guidance with the likelihood of stressing that it will maintain an accommodative stance on easy monetary policy. Recent inflation figures showed that after a brief spell of inflationary pressures, both the headline and core inflation rate slipped in March.
While the headline CPI made news a few weeks ago as inflation touched 2%, the 1.5% rise in March on the headline consumer prices and a 0.7% rise in the core inflation rate which was slower than the previous months are likely to weigh on the ECB officials.
Read more: https://www.orbex.com/blog/2017/04/ecb-april-preview-no-changes-expected-inflation-remains-tame/