European Central Bank Press conference comparison — 29 October 2020 vs 11 March 2021
This European Central Bank press conference comparison covers 29 October 2020 and 11 March 2021. Overall, the newer document was broadly unchanged. The ECB's tone remains consistently dovish from October 2020 to March 2021, with the current document operationalizing earlier commitments to ease further. The next decision is likely to maintain or increase accommodation given persistent downside risks to inflation and growth.
What changed
Broadly unchanged. The ECB's tone remains consistently dovish from October 2020 to March 2021, with the current document operationalizing earlier commitments to ease further. The next decision is likely to maintain or increase accommodation given persistent downside risks to inflation and growth.
- Inflation — Little changed. Inflation assessment remains dovish in both documents, with prior highlighting negative inflation and current dismissing the recent pick-up as transitory; no directional shift.
- Labour Market — Little changed. Labour market language remains dovish, with prior citing 'significant slack' and current noting 'limited wage pressure'; no material change.
- Rate Path — Little changed. Rate path stance remains dovish, as prior pre-committed to recalibration and current delivers faster PEPP purchases; no shift in direction.
- Balance Sheet — Little changed. No material balance sheet signals in prior, and current neutral language on yield curve focus; no shift.
Key wording
significant slack in labour and product markets
In the current environment of risks clearly tilted to the downside
On the basis of this updated assessment, the Governing Council will recalibrate its instruments, as appropriate, to respond to the unfolding situation and to ensure that financing conditions remain favourable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path.
On the basis of this updated assessment, the Governing Council will recalibrate its instruments as appropriate, to respond to the unfolding situation and to ensure that financing conditions remain favourable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path.
We decided to reconfirm our accommodative monetary policy stance.
Headline inflation is likely to remain negative until early 2021.
Wage pressure. There is clearly limited pressure up on wages.
Market interest rates have increased since the start of the year, which poses a risk to wider financing conditions. If sizeable and persistent, increases in these market interest rates, when left unchecked, could translate into a premature tightening of financing conditions for all sectors of the economy.
Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year.
We expect them to remain at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 per cent within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
Overall, the risks surrounding the euro area growth outlook over the medium term have become more balanced, although downside risks remain in the near term.
Inflation has picked up over recent months mainly on account of some transitory factors and an increase in energy price inflation. At the same time, underlying price pressures remain subdued in the context of weak demand and significant slack in labour and product markets.
Official documents
Background reading
Related
29 October 2020 press conference · 11 March 2021 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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