In the account of October 28-29 ECB meeting, it’s noted that “risks surrounding the growth outlook to be clearly tilted to the downside”. The assessment “largely reflected the recent resurgence in COVID-19 infections, the associated intensification of containment measures and the high uncertainty surrounding the timeline of the pandemic and the implications for economic and financial conditions.”
“Given the sharper slowdown in growth momentum and the weakening of underlying inflation dynamics compared with what had previously been expected, as well as the deterioration in the balance of risks, it would be warranted to recalibrate the monetary policy instruments in December.”
However, it’s noted that more than half of the PEPP envelope was still available in case of “renewed market turbulence”. “By the time of the December meeting, updated staff projections would be available and a clearer picture of the dynamics of the pandemic and prospects of a vaccine might have emerged, together with more information on the fiscal policy responses in the euro area.”
