Will the ECB shift its monetary stimulus guidance?

The European Central Bank meets on Thursday just two weeks after agreeing on its first strategic overhaul in almost two decades in what promises to be a lively debate among members over what guidance it should give on the path of interest rates and bond purchases.

The 19-month-long strategic review concluded with the 25 members of the central bank’s governing council agreeing to tolerate some overshooting of its simplified and slightly higher 2 per cent inflation target, in an attempt to avoid being trapped in a low rate, low inflation world.

That unanimity is set to be tested at this week’s policy meeting. Christine Lagarde, ECB president, told the Financial Times last week that she did not expect the unity reached by policymakers on the new strategy to hold when the discussion turned to implementing the changes.