Some ECB policymakers wanted more cautious tone on growth: sources

September 14, 2018

FRANKFURT (Reuters) – A handful of European Central Bank policymakers urged President Mario Draghi to strike a more cautious tone on the economy in this week’s policy message but were ultimately won over, two sources told Reuters.

The ECB cut its growth forecast for the euro zone at Thursday’s meeting but reaffirmed plans to continue withdrawing its monetary stimulus in the coming months, arguing that a benign picture at home offset turbulence in emerging economies.

It even repeated a reference to “broadly balanced” risks – central bank parlance for a situation where the odds on positive and negative surprises are roughly the same.

But a minority of participants at Thursday’s Governing Council meeting emphasized that debt markets were becoming more nervous and advocated taking a more pessimistic stance by saying risks were “tilted to the downside”, two sources familiar with the deliberations said.

Aside from swings in the Turkish lira and the Argentine peso, the ECB faces some worries closer to home as Italy has seen its borrowing costs rise since an anti-establishment government took power in June.

“Some were a little more cautious than others,” one of the sources said. An ECB spokesman declined to comment.

(Reporting By Frank Siebelt, Francesco Canepa and Balazs Koranyi; Editing by Mark Heinrich)

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September 14, 2018 at 10:40PM
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