European Central Bank to step up pace of stimulus programme

The European Central Bank said Thursday it will step up its bond-buying stimulus in the coming months, a step aimed at halting what is regarded as a premature rise in borrowing costs in the 19 countries that use the euro.

The central bank said that over the next quarter the purchases would be conducted at a significantly higher pace than during the first months of the year."

ECB officials have expressed concern at the rise in longer-term borrowing rates, regarded as a spillover from the U.S., where the economic recovery is expected to be faster. The eurozone is still in a double-dip recession and is seen by economists as not ready for rising rates.

Yields on long-term government bonds have risen by about 0.3 per cent since the start of the year in the eurozone. That is not much, and rates remain low. But the ECB wants to avoid any premature tightening of credit while businesses are still struggling with coronavirus lockdowns.