In a blog post, ECB chief economist Philip said despite some rebound in activity, “the level of economic slack remains extraordinarily high and the outlook highly uncertain.” “Further progress in persistently containing the virus will be central in determining the size and speed of the economic recovery, together with sufficiently-supportive fiscal and monetary policies.”

He hailed that the recently agreed Next Generation EU instrument will be “vitally important in ensuring sufficient fiscal support across EU Member States in the coming years”. For ECB’s part, the central bank is “committed to providing the monetary stimulus needed to support the economic recovery and secure a robust convergence of inflation towards our medium-term aim.”

Lane downplayed the recent lower pace of PEPP purchases in July, “the usual summer lull” in market activity. He emphasized that “the overall envelope of PEPP purchases is a core determinant of the ECB’s overall monetary stance”.

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Full blog post here.

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