Weak growth to continue in EU for 2015

As expected, the ECB left policy on hold at last week’s Governing Council meeting. It cut rates at both its June and September meetings and is still in the process of fully implementing some of the easing measures announced in September.

Hence, no new announcements were expected last week. However, following the meeting, the ECB did indicate that it would reassess the situation in the new year to see if further easing is needed.

The ECB expects that its current asset purchase programmes and other liquidity initiatives will have a significant impact in terms of expanding the size of its balance sheet, thereby loosening policy.