Five things we learned from the ECB meeting

1.

Interest rates are staying right where they are. With the key refinancing rate at 0 per cent already, the ECB does not have a lot of ammunition left. It has already moved the deposit rate it pays banks on overnight funds to minus 0.4 per cent.

2.

Its programme of monetary expansion will continue until next March – at least. There had been some speculation that the ECB might announce that this quantitative easing (QE) programme – under which it is buying €80 billion of bonds each month – would extend beyond next March. In the event it maintained its existing language indicating that the programme would go to next March, “at least.” So it is keeping its options open.

3.

The ECB remains downbeat on economic growth prospects for the euro zone. It made no significant changes to its forecasts, edging up its GDP growth estimate this year to 1.7per cent from 1.6 per cent previously and going the opposite direction for 2017 and 2018, cutting the forecast for both years to 1.6 per cent from 1.7 per cent previously. The ECB only expects inflation to be 0.2 per cent this year and pick up to 1.2 per cent next year, the latter revised down slightly from 1.3 per cent. The ECB president said the changes were “not so substantial to warrant a decision to act”.

As the ECB’s target is to get the rate of inflation up close to 2 per cent, this indicates that interest rates are going to remain at rock bottom for a good while yet.

4.

Despite the downbeat forecasts, Mario Draghi continues to talk up the impact of what the ECB is doing, and its willingness to do more. The ECB tweeted out one comment: “There is no question about the will to act, the capacity to act, and the ability to do so.” Mr Draghi insisted that the bank’s policies were working, but also repeated that governments need to do more.

5.

The ECB faces a difficulty finding enough bonds to buy for its QE programme, while also staying within rules it has set itself for the plan about the type and amount of different bonds it will buy. Questioned about this, Mr Draghi would only say that relevant committees in the ECB were looking at all options to redesign the programme as needed. However, he said that an expansion of the programme was "not discussed" at the council meeting itself – it is a very contentious point as a group of monetary hawks, led by Germany, is already unhappy with the scale of what the ECB is doing.