ECB begins cautious taper while holding rates

PEPP will end by March 2022

Elliot Gulliver-Needham
clock • 2 min read

The European Central Bank has begun withdrawing its €70bn Pandemic Emergency Purchase Programme (PEPP), reducing it in the first quarter of next year and ending it by March 2022.

While the central bank will begin tapering, much of the impact will be offset by doubling the Asset Purchase Programme (APP) to €40bn in Q2 next year, due to increasing uncertainty around the omicron variant. This will be reduced to €30bn in Q3 and return to the current €20bn in Q4. Furthermore, the reinvestments from PEPP will continue until at least the end of 2024 and could be restarted at any time if deemed necessary. Carsten Brzeski, chief economist for ING Germany, said on Twitter that while the decisions today were rather dovish, "inflation projections and risk assessment are r...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Markets

Square Mile's CIO Mark Harries: Are we in an AI-generated bubble?

Square Mile's CIO Mark Harries: Are we in an AI-generated bubble?

'Only time will tell how the AI revolution reshapes the market'

Mark Harries
clock 17 May 2024 • 4 min read
Market Movers Blog: Palliser Capital calls on Rio Tinto to abandon its London listing

Market Movers Blog: Palliser Capital calls on Rio Tinto to abandon its London listing

Latest news and analysis

Investment Week
clock 25 April 2024 • 1 min read
How big an impact could global elections have on portfolio allocation in 2024?

How big an impact could global elections have on portfolio allocation in 2024?

US, UK and India main focuses

Investment Week
clock 19 February 2024 • 8 min read
Trustpilot