Despite Economic Recovery, the European Central Bank Keeps Its Policies Steady

Even as Europe’s economic outlook is rapidly improving, European Central Bank policymakers decided on Thursday to maintain their “very accommodative” monetary stance, the New York Times reported. Governments are lifting lockdown restrictions and the vaccine rollout has sped up, which has led to a bounce in the services industry and “ongoing dynamism” in manufacturing, Christine Lagarde, president of the central bank, told reporters at a news conference in Frankfurt. “We expect economic activity to accelerate in the second half of this year as further containment measures are lifted,” she said. But Ms. Lagarde stressed thatlots of support was still needed and that policymakers were giving the economy a “steady hand.” “Uncertainties remain, as the near-term economic outlook continues to depend on the course of the pandemic,” she added. The bank said that it would hold interest rates at record low and negative levels while continuing to buy bonds in its pandemic response program at “a significantly higher pace” for the next quarter compared with the start of the year — currently, a rate of about 80 billion euros a month. Read more.