ECB removes reference to lower rates, more QE possible

As such, most economists think Mario Draghi, the ECB's president, will acknowledge the improved growth but hold off from announcing any change to the bank's array of stimulus programs.

Analysts think the bond purchases will be tapered next year, but the bank has moved gingerly in indicating when it might be ready to announce a schedule for reducing and then ending them.

Against this backdrop, the European Central Bank is widely expected to keep policy unchanged on Thursday, including its 2.3 trillion euro ($2.59 trillion) bond-buying programme and sub-zero interest rates, despite resistance from cash-rich Germany.

The evidence is piling up that the growth in the eurozone has kicked into a higher gear and the region is recovering from the Great Recession and its crisis over high debt.

The European Central Bank left all its key interest rates unchanged, as expected.

The central bank's quantitative easing program, which stands at a current monthly pace of €60 billion, will run until the end of December 2017, or beyond if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The measure pumps newly printed money into the economy in an effort to raise inflation toward the bank's goal of just under 2 percent considered best for the economy.

The bank kept interest rates and its bond-purchase stimulus program unchanged at a meeting Thursday of its 25-member governing council.

The euro fluctuated after the decision and was down 0.2 percent at $1.1233 at 1:49 p.m. Frankfurt time.

The news chimed with a leaked draft forecast reported on by Bloomberg ahead of the policy-setting meeting, which said the European Central Bank was preparing to cut its inflation outlook after projecting lower consumer price growth at 1.5% across 2017, 2018 and 2019. Eurostat said household consumption contributed 0.2 percentage points and gross fixed capital formation 0.3 points and government consumption 0.1 points to the first-quarter growth figure.

The sticking point is inflation, which remains weak.

Sources told Reuters last week the European Central Bank will acknowledge the improved economic outlook by removing a reference to "downside risks" in its statement.

Yet rate setters did not even discuss winding down the ECB's 2.3 trillion euro ($2.6 trillion) asset purchase scheme, kept rates below zero, and pledged very substantial accommodation.

If a rate is negative the bank will pay the ECB (rather than receiving money in interest). It held Thursday's meeting in Tallinn, Estonia, one of the occasional meetings held away from the bank's Frankfurt headquarters to underline its identity as a multinational institution.

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