Uncease continues as the ECB meets

Focus is on the bank's inflation projection

Uncease continues as the ECB meets

Picture by: Thanassis Stavrakis / AP/Press Association Images

The European Central Bank (ECB) is expected to hold interest rates, and to raise growth and inflation forecasts when it meets today.

If the projected inflation rate is increased this will be due to oil prices recovering, rather than an upswing across Europe although the price of services is also on the up. This would be the first positive interest forecast revision since early 2015.

The eurozone is stuck between an upswing and a situation where further stimulation would be warranted. Inflation in the bloc was -0.1% in May, well below the monetary union's 2% target rate.

The ECB continues to buy assets worth €60bn per month as part of its €1.74tn quantitative easing programme.

Interest rates have already been cut to historic lows, and the ECB will begin buying corporate bonds today - this policy is described by the New York Times as "effectively paying banks to lend to businesses."

ECB President Mario Draghi is expected to plead for patience from member states as the bank's previous stimulus measures take effect.

While the US Federal Reserve considers the timing of its next rate hike - Mr Draghi maintains that he does not believe that further cuts will be warranted.

Eurozone unemployment remains above 10%.