European Central Bank keeps stimulus measures on track
FRANKFURT — With the eurozone economy showing strong growth, the European Central Bank left its interest rates and stimulus measures unchanged Thursday as it looks ahead to the delicate matter of ending its bond-purchase program next year.
The Bank of England also left its key rate unchanged at 0.5 per cent amid uncertainty about how Britain’s departure from the European Union, expected in March, 2019, will affect the economy.
Together, Thursday’s decisions show how the eurozone and Britain are moving more slowly than the U.S. Federal Reserve as the world’s leading central banks start to gingerly withdraw the massive stimulus measures they deployed against the 2007-2009 financial crisis and the subsequent Great Recession.
The Fed on Wednesday raised its benchmark federal funds rate by a quarter-point to 1.25-1.50 per cent and signalled that three more hikes could come next year. The Fed is also withdrawing some of the stimulus from its years of bond purchases by letting some of its holdings run down.