Draghi ‘very unlikely’ to cut interest rates or boost SME lending

The ECB president Mario Draghi is highly unlikely to cut the interest rate or announce a big bazooka for SME lending at tomorrow’s monthly meeting, according to senior economist with Brussels-based ING, Carsten Brzeski.

“The question is whether the ECB is willing to give as explicit forward-guidance as the Fed by, for example, quantifying targets (or target zones) for unemployment and inflation.

“We don’t think so. In our view, Draghi will try to give ECB-style guidance on the fragility of the recovery, on full allotment until the summer of 2014, and on the ECB’s determination to do more if need be. This should push any exit speculation into the distant future,” said Mr Brzeski.