The short-form accounts of the ECB's October meeting contained no surprises.
In terms of the economic outlook, recent economic data were acknowledged as being somewhat weaker than expected. However, they were still regarded as consistent with the baseline scenario of an ongoing broad-based economic expansion, supported by domestic demand and continued improvements in the labour market. Some recent sector-specific developments were noted as having an impact on the near-term growth profile and there was some evidence that uncertainties surrounding trade were affecting business. Even so, the risks to the forecast were still considered as broadly balanced although the threat of protectionism, vulnerabilities in emerging markets and persistent financial market volatility remained prominent.
Meantime, underlying inflation was expected to pick up, supported by a steady increase in wages and the build-up of pressures at the early stages of the pricing chain.
The assessment called for patience, prudence and persistence in monetary policy and the Governing Council duly recognised the need to maintain its accommodative stance. It would also reiterate its anticipation that, subject to incoming data confirming its medium-term inflation outlook, QE net asset purchases would finish at the end of December. However, it would reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of the net asset purchases. Forward guidance would continue to play a key role in influencing market expectations going forward.