By Trevor Hunnicutt
NEWYORK (Reuters) – The European Central Bank is prepared to resume its money-printing programme if needed to boost inflation in the euro zone but so far it has not discussed such an option, its vice-president Luis de Guindos said on Thursday.
With growth and inflation in the euro zone slowing, investors have started to speculate on what the ECB could still do, having already bought 2.6 trillion euros (£2.3 trillion) worth of bonds and pushed its key interest rate below zero.
De Guindos stuck to the ECB’s official expectations for a growth rebound in the second half of the year, which some of his own colleagues have started to doubt.
But he maintained the ECB had many stimulus tools, including more asset purchases – known in market parlance as “quantitative easing” (QE).
“We closed our QE programme at the end of last year but… it’s something that we can use again if needed,” de Guindos told an event moderated by Reuters Breakingviews in New York.
He cautioned however that ECB policymakers never discussed resuming bond purchases or buying stocks, an option that has been the subject of recurring market speculation.
De Guindos added he expected euro zone growth to come in at 1.1-1.2 percent this year, in line with ECB forecasts published last month.
But sources have told Reuters several ECB policymakers think the bank’s economic projections are too optimistic as growth weakness in China and trade tensions linger.
“Our projections is that we are going to have a rebound in the second half of the year,” de Guindos said.
(Writing by Francesco Canepa in Frankfurt; Editing by Gareth Jones and Toby Chopra)