The European Central Bank will announce in October a six-month extension to its asset purchase programme but will cut how much it buys each month to 40 billion euros from January, according to the latest Reuters poll of economists. David Pollard reports.
It's been over two years now. And over two trillion euros of bond purchases. But could next month be the beginning of the end of the ECB's massive QE programme? Mario Draghi last week signalled the bank was looking at ways to wind it down. A new Reuters poll says the first ECB announcement will come next month. Economists are almost unanimous in that view. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "What Draghi had said is that he would in fact consider extending QE if necessary beyond the end of this year. So I think all the options are open. But of course he also has to recognise that the European economy is growing at the fastest rate in six years. Inflation on the other hand is still very low. It's below its target of 2 percent for the euro zone as a whole." The poll sees a reduction from 60 to 40 billion euros of purchases a month from January. A stronger economy lends weight ... New data even shows traditionally sluggish wage growth at two per cent - its fastest in two years. Swinging against it: the euro's 13 per cent rally against the dollar this year - dampening imported inflation. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "I don't think we're going to see anything dramatically changing because there are so many uncertainties still in Europe, including unemployment rates higher in many countries, and of course a huge debt burden is still there and non-performing loans which are quite considerable across Europe even though they're getting better." But the decision could also be purely practical. Having bought so many bonds, there aren't many still left to buy. Asked whether the ECB would close the programme completely, most answered 'yes' - by the end of next year.