What could upend the ECB’s plans?

The ECB finally announced this week that the end of its asset purchase programme is in sight and that rates will stay on hold at least until the second half of 2019. But the ECB is not on auto-pilot until next September: Mr Draghi was keen to stress that the Bank’s plans are not set in stone. While our base case remains for the first rate rise to come in September 2019, we think that there are three factors that might cause the ECB to change its plans. First, a continued slowdown in euro-zone GDP growth. Second, much weaker inflation. And third, renewed, more intense worries about Italy. To our mind, the inflation risk seems the most likely to materialise.