EU economy finds its footing as ECB gets ready to launch QE program
FRANKFURT—The decline in consumer prices moderated in Europe last month while unemployment fell to its lowest rate in nearly three years, an indication that the region’s economy is gradually finding its footing even before the European Central Bank launches a €1 trillion-plus stimulus program aimed at reducing borrowing costs and stimulating growth.
The reports came three days ahead of the ECB’s regular monetary policy meeting Thursday, which will take place in euro member Cyprus. Officials are expected to refrain from any new stimulus and instead provide details on how they will execute a €60 billion-per-month asset purchase program, mostly in government bonds, later this month. The ECB announced the plan, known as quantitative easing, or QE, on Jan. 22.
Signs of somewhat firmer, albeit still falling, consumer prices and reduced joblessness underscored that the ECB has already achieved considerable stimulus through the financial markets—via lower bond yields and a weaker euro exchange rate—before buying a single government bond. That will make it easier for the central bank to claim success for its stimulus program, assuming these positive trends continue, analysts said.
