ECB set to resist bond buyback hopes

The European Central Bank is likely to dismiss hopes it will enter a government bond-buying programme.

The FT reports the ECB will resist expectations it will buy back corporate or sovereign debt and leave any possible discussions on the topic until 2015.

Hopes the ECB would announce a new package of quantitative easing this month increased when president Mario Draghi said in November the ECB should boost inflation “without delay”.

With inflation at 0.3 per cent, well below the ECB target of 2 per cent, longer term inflation hopes are also still below the 2 per cent target.

ECB deputy president Vitor Constâncio last week said the bank wanted to wait until the first quarter of next year to analyse the impact of existing stimulus.

At the end of last week the ECB had bought some €17.8bn of covered bonds and €368m of asset-backed securities.