The ECB will this week decide to trim its asset purchases, according to a Reuters poll of economists, while also extending its QE programme. But as David Pollard reports, economists are split on just how long the extension could be, and on the scale of any reduction, just as doves and hawks at the bank may also be divided.
Mario Draghi's press conference starts at 1230gmt on Thursday. But some are calling it High Noon. As it becomes clear what sort of showdown has played out between the doves at the ECB - and the hawks. Markets are bracing for an adjustment to QE. If no adjustment to an armoury of ultra-low rates. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: Draghi he has made very clear that he's prepared to continue with it as necessary ... What we've got though at present, if you ask economists quite widely, is an expectation that interest rates will stay low. There really will not be any serious increase in rates possibly for another year. All economists in a Reuters poll see the ECB reducing its asset purchases from 60 billion euros a month, effective from January. But that's where the unanimity ends. Some see a reduction by as little as 5 billion a month - one by 40 billion - with the median at 20. Draghi is also thought likely to extend QE. But there too they're split - on whether it will be by six months - or nine. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: The ECB I think would be very satisfied with what it's done over the past couple of years. It's managed to stabilize and then push the EU's own economy in the right direction. I think overall it remains in the right place policy wise with a slow move towards gently tapering with a careful eye on any further disruptions that might mean it has to alter that policy. Though with Germany absent a government and Catalonia in danger of having its (government) overruled by Madrid, disruption is still a threat. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: And of course there's Brexit and the implications for growth could be actually quite significant ahead if some of those uncertainties are not resolved, whether it's Spain or anywhere else. And though growth is on its best run for a decade, low inflation may also make for a reluctant ECB. That, together with still high unemployment in the euro zone, and barely visible wage growth.