The European Central Bank is all but certain to promise an even longer period of stimulus on Thursday to make good on its commitment to boost inflation, but the debate among policymakers is likely to be tense and no new measures will be announced.
The Governing Council will meet for the first time since the ECB unveiled a tweaked inflation target earlier this month, the culmination of an 18-month strategic review of its roles in an array of areas from inflation to climate change.
Among its conclusions, it said longer periods of ultra-low inflation such as the current one require “especially forceful or persistent” support — an ambiguous formulation that is proving difficult to convert into actual policy.
Rate-setters squabbled in early July over how to tailor their policy guidance to fit that commitment and eventually put off making any change in order to maintain unanimous support for the ambitious new strategy document.
The same differences are set to resurface on Thursday and conservative policymakers like Bundesbank chief Jens Weidmann are unlikely to relent, so ECB chief Christine Lagarde will either have to compromise or forego her desire for unanimity.
