FRANKFURT (Reuters) – Prolonged uncertainty is dampening the euro zone’s growth outlook, particularly for manufactured goods, the European Central Bank said in a regular Economic Bulletin on Thursday.
Trade tensions are high and the risk of a no-deal Brexit remains, pointing to weaker euro zone growth in the second and third quarters, the ECB said, which is largely consistent with its policy statement after the July interest rate meeting.
Last month the ECB all but promised more stimulus in the coming months, putting a rate cut and more bond buys firmly on the table as the growth outlook deteriorates amid spreading uncertainty and a manufacturing recession.
Still, recent data and survey indicators continue to point to positive employment growth, which is likely to support household income and consumer spending, cushioning the blow to the bloc from weak trade, the ECB added.
(Reporting by Balazs Koranyi; Editing by Alison Williams)